Criminal Violations in State Property Privatization Discovered; Criminal Case Initiated

The RA Prosecutor General's Office, through its Department for the Protection of Public Interests, continues to investigate the compliance of the processes regarding the privatization of properties recognized as state property, based on documents received from the RA State Property Management Committee. During this investigation, apparent criminal acts relating to property evaluation and privatization processes have been uncovered.

Specifically, the latest documents received from the RA State Property Management Committee reveal that officials from the State Property Management Department of the RA proposed to a private company in 2016 to conduct an evaluation of a non-residential area measuring 343 square meters located at 3 Vilnius St., Nor-Nork community, Yerevan. Based on this proposal, and without any legal basis or a contract for service provision, the private company issued a conclusion in December 2017 stating that the market value of the property was 33.8 million AMD.

Subsequently, based on this evaluation, the property was sold to a citizen for 21.6 million AMD, according to the purchase-sale agreement. However, a market value analysis conducted by the 'State Property Inventory and Valuation Agency' of the State Property Management Committee revealed that the property’s market value could have been 48 million AMD as of December 2017, at the time of the conclusion by the private company. This indicates that officials responsible at the State Property Management Department violated the requirements of Article 9, Part 2 of the RA Law on 'Real Estate Valuation Activities' by commissioning the evaluation work without legal grounds and a signed contract.

As a result, the expert from the private company prepared a false conclusion, significantly undervaluing a property worth 48 million AMD. Consequently, the property was sold for more than two times less than its estimated market value.

Considering that the investigation has collected sufficient information indicating apparent attributes of a crime involving abuse of official power by public officials that could lead to severe consequences, the RA Prosecutor General’s Office has initiated criminal proceedings under Part 2 of Article 308 of the RA Criminal Code. This investigation has been assigned to the RA Investigative Committee.