Property of Yerevan Jewelry Factory Sold at Nearly Four Times Lower Price; Criminal Case Initiated

The property of the "Yerevan Jewelry Factory" LLC has been sold at approximately four times less than its book value, according to a report from the Office of the Prosecutor General of Armenia.

A study conducted by the Office's Department for Protection of State Interests revealed clear signs of criminal abuse related to the disposal of the property of the company, which has an 80% state share. Specifically, based on the documents requested and received from the State Property Management Committee and the Service for Execution of Judicial Acts of the Republic of Armenia, it was determined that a total of around 56 million AMD in state duties should have been seized from the Yerevan Jewelry Factory LLC in favor of the state budget through court decisions.

To enforce this, the court issued an enforcement order on March 6, 2019, allowing enforcement proceedings to be initiated on March 7, 2019, resulting in an attachment being placed on the LLC’s property. Subsequently, by a decision of the compulsory enforcement service on February 24, 2020, an expert was appointed to assess the value of several precious items belonging to the Yerevan Jewelry Factory.

The assessed book value of the property was found to be approximately 83.5 million AMD. However, the expert hired by the designated company evaluated it at only about 38.3 million AMD, which is about 2.5 times lower than its book value. Later, this property was presented at a compulsory electronic auction, where it was acquired by a citizen for merely 21.5 million AMD, roughly four times less than its book value. This means that the employees of the designated company misused their powers against the interests of the organization, prepared a misleading appraisal, and submitted it to the enforcement service, resulting in the property being sold at a significantly lower price than its real (book) value, leading to severe repercussions for the Yerevan Jewelry Factory and causing damage of about 50 million AMD.

Given that the study revealed evidence of abuse of powers by employees of trade or other organizations, and the resulting significant damage and serious consequences, a criminal case has been initiated under part 2 of Article 214 of the Criminal Code of Armenia by the Prosecutor General's Office's Department for Protection of State Interests. Previously, it was reported that the responsible officials of the Yerevan Jewelry Factory LLC had failed to submit the documents supporting their claim to the court, despite their existence, and as a result of not addressing the shortcomings of the cassation complaint noted by the Court of Cassation in the same case, the factory was deprived of the possibility to claim over 1 billion AMD in debtor debts, in addition to being burdened with the obligation to pay around 56 million AMD in state duties. Another criminal case has been initiated by the Prosecutor General's Office's Department for Protection of State Interests under part 2 of Article 315 of the Criminal Code of Armenia regarding this matter.