State Property Sold Through Abuse of Official Authority

The Department for the Protection of State Interests of the Prosecutor General's Office has investigated documents received from the State Property Management Committee regarding the sale of another property claimed as state property, revealing apparent criminal manifestations.

According to the Public Relations Department of the Prosecutor General's Office, it was found that a company, based on a conclusion dated March 2017, was presented by the State Property Management Department, concerning the market value of several properties. These included: an administrative building at 18/2 Mikoyan Street, Nor Nork community of Yerevan with an area of 145.2 sqm, a car wash area of 495.32 sqm, a gas station of 18.9 sqm, a utility building of 1062.8 sqm, an industrial building of 3687.6 sqm, an electric station of 24.5 sqm, a transformer substation of 27.7 sqm, a workshop of 10.14 sqm, a storage area of 31.36 sqm, a canteen of 220.14 sqm, an administrative building 1 of 471.22 sqm, a fence with an area of 102 sqm /183.6 cubic meters/, and a land plot of 24678 sqm, with a total market value assessed at only 92.4 million AMD.

However, the assessment by the company was conducted in violation of the requirements of the Law of the Republic of Armenia on Real Estate Assessment, specifically without signing a service contract. Furthermore, the assessment conclusion was not approved by the signature of the head of the Company’s executive body as required by law.

Despite these issues, the Government’s decision from April 20, 2017, allowed the State Property Management Department to sell the property by tender, basing its decision on the aforementioned assessed value.

As a result, the property was sold for 35.5 million AMD following a competition held on September 4, 2017. Subsequent analysis of the mentioned real estate’s market value as of March 2017 revealed that the market value of the sold property could have been 464 million AMD, nearly five times higher than the assessed value provided by the company.

Thus, the recorded facts indicate that officials from the State Property Management Department, by abusing their official position during 2017, facilitated the company to conduct property valuation work, then accepted an assessment conclusion prepared by the company that contradicted legislative requirements due to illegal actions. This undervalued assessment, which was almost five times lower than the likely market value, was used as a basis for selling the property at a significantly reduced price in the tender process. Consequently, the property was sold for almost 13 times less than its potential market value, resulting in severe consequences for the state.

Based on the findings of the State Property Management Committee and the Prosecutor General's Office’s Department for the Protection of State Interests, a criminal case has been initiated under part 2 of Article 308 of the Criminal Code. The investigation has been assigned to the Investigative Committee of the Republic of Armenia.

Notice: A suspect or accused individual is considered innocent until proven guilty according to the procedures established by the Criminal Procedure Code of the Republic of Armenia by a legally binding court verdict.