State Property Sold for Three Times Below Market Value; Criminal Case Initiated

Based on the documents received from the State Property Management Committee, the Department for the Protection of State Interests of the Republic of Armenia's Prosecutor General's Office examined the legality of the privatization process of a 70 square meter basement and a 20.4 square meter land plot located at 68 K. Ulitsyan Street in Yerevan.

The examination revealed that the market value of the mentioned property, owned by the Republic of Armenia, was assessed at 10.3 million AMD according to a conclusion prepared by a private company on March 24, 2017, initiated by the State Property Management Department of the Republic of Armenia. However, it was determined that this conclusion was made in disregard of the requirements of the RA Law on the Evaluation of Real Estate.

Specifically, the parts of the conclusion that pertain to the estimated market value of the property at that time were not signed by the evaluator, and the conclusion was not validated with the signature of the head of the executive body of the private company. Despite these circumstances, on April 20, 2017, the Government of Armenia allowed the State Property Management Department to privatize the property through a competition, relying on the market value reflected in the conclusion.

As a result of the competition held on June 30, 2017, the property was sold for approximately 6 million AMD. However, analysis provided by the State Property Inventory and Valuation Agency on December 6, 2019, concluded that the probable market value of the property could have been around 19 million AMD as of 2017, which is nearly double the value assessed by the private company.

Thus, the recorded facts indicate that responsible officials at the State Property Management Department of the Republic of Armenia have ostensibly abused their official positions to the detriment of state interests. The unfounded conclusion, which assessed the market value of the property at almost half the probable market value, was taken as a basis by the responsible officials when determining the assessed value of the property and subsequently privatizing it through a competition. As a result, it was sold for nearly three times less than the probable market value, causing significant repercussions for the state.

Considering that the studies yielded information containing signs of an apparent crime, a criminal case has been initiated in the Department for the Protection of State Interests of the Prosecutor General's Office under part 2 of Article 308 of the RA Criminal Code.

The criminal case has been forwarded to the Investigative Committee of the Republic of Armenia for further investigation.

Note: A suspect or defendant is presumed innocent until proven guilty in accordance with the legal proceedings established by the RA Criminal Procedure Code by a conviction that has entered into legal force.