Armen Sarkissian-Linked Company Purchases Property for €7.5 Million Near the Champs-Élysées

The President of Armenia, Armen Sarkissian, held the position of director at the French company "VH Estate" for nine years, including during his presidency. In 2010, the company acquired two properties in one of Paris's wealthy districts, the 8th arrondissement, neighboring the Champs-Élysées, for €7,510,000, as reported by "Hetq".

In 2010, Sarkissian's sister, Dr. Karine Sarkissian, and her daughter, Tatevik Sarkissian, founded the company "VH Estate" in Paris. This is a civil company, meaning it does not engage in commercial activities. In France, firms of the type "société civile immobilière" are typically used for owning and managing real estate.

VH Estate’s activities are described in France and abroad as the acquisition and management of real estate, service provision, and leasing ("société civile" type companies are allowed to lease property and generate income). At the time of incorporation, 99% of the company was registered under Karine Sarkissian’s name, with 1% under Tatevik Sarkissian’s. The director (gérant non associé) from 2010 to 2019 was Armen Sarkissian, who took office as Armenia's president in April 2018. Sarkissian has two sons, Vardan and Hayk, whose initials coincide with the company's name.

"VH Estate" purchased the properties using a large loan in Paris. The company bought the properties for a total of €7,510,000 in the summer of 2010 from a certain Lukas, located 500 meters from the Arc de Triomphe, at 2 Avenue de l’Opéra.

Within the framework of the transaction, "VH Estate" took out two loans for €7,510,000 and €240,000 from the Monaco branch of Société Générale’s private banking division, securing the entire property as collateral. The loans were interest-free and due in June 2018. However, in addition to the loans, "VH Estate" had to pay an insurance fee of 20% on each loan for the secured property, amounting to €1,502,000 and €48,000.

In autumn 2017, a subrogation occurred, with the creditor of a total of €7,750,000 being formalized as Union Bancaire Privée (UBP) from its Monaco branch instead of Société Générale (Monaco). The deadline for the completion of the loan obligations for Sarkissian’s company was stated as October 2023. The interest rate was set at 1.3%, while the insurance payment for the secured property was fixed at 10%, amounting to €775,000.

Additionally, beyond the two secured properties, in December 2017, Karine Sarkissian pledged her 99% share in "VH Estate" in favor of UBP as collateral for the payment of the total €7,750,000 loan.

We asked President Sarkissian if the "VH" in the company name represents the initials of his sons Vardan and Hayk and how the company is repaying the €7.75 million loan, as well as who is utilizing the Paris real estate—whether it is the president and his family members or if the property is leased. The president's office responded that these matters pertain to personal information that is not subject to disclosure under the "Freedom of Information" law.

President Sarkissian did not declare his directorship in the French company. From 2013 to 2018, he served as Armenia's ambassador to the United Kingdom. According to the law on diplomatic service, a diplomat is not permitted to undertake any other paid employment other than scientific, educational, or creative work. If Sarkissian's declarations are to be believed, he did not engage in such work, meaning he did not receive compensation from "VH Estate".

During his tenure as ambassador from 2013 to 2018, Armen Sarkissian declared no income, indicating he received no salary from any source, including the ambassador's office. However, in 2013, when he was appointed as ambassador, he had €8 million in assets, which decreased to €5.5 million by January 2018, just three months before he became president.

Following his presidential appointment, Sarkissian declared his salary as the head of state and interest earned from deposits in two banks. Once again, he received no income from "VH Estate".

The Constitution of Armenia, under Article 124, allows that "the President of the Republic shall not hold any other office, engage in entrepreneurial activity, or perform any other paid work." In response to our inquiry, the president's office stated that "VH Estate" does not engage in entrepreneurial activities and that Armen Sarkissian has never been compensated as the company's director.

Nevertheless, even if Sarkissian did not receive compensation for paid work during his time as ambassador and president, it remains a fact that he held the position of director at "VH Estate" from 2010 to 2019.

The president's office communicated that this does not constitute a violation of the Constitution: "The legal limitation defined in part 4 of Article 124 of the Constitution pertains solely to work performed for compensation. This implies that the President can have various roles in different organizations on a voluntary basis." Thus, according to the president's office, serving as an unpaid director in any organization does not violate the Constitution.

In contrast, legal scholar and former Minister of Justice Gevorg Danielyan explains that the term “office” in this context has a specific meaning, exclusively related to positions within the public authority system. For example, the president cannot be elected or appointed to any body endowed with public authority, even if it conducts advisory functions. Therefore, the term "office" cannot relate to non-governmental organizations, including companies. Danielyan asserts that Armen Sarkissian did not violate the Constitution.

Nonetheless, President Sarkissian did not declare his directorship at "VH Estate," which he was obliged to do because individuals presenting declarations are required to also fill out a declaration of interests starting in 2019, indicating their roles in the management, administrative, or supervisory bodies of commercial and non-commercial organizations. Since this requirement has been in effect since 2019, and Sarkissian was director until February 2019 according to "VH Estate" documents, he should have indicated in his 2019 annual declaration that he held the directorship in the French company throughout the year, which he did not do.

Instead, in his annual declarations for 2019 and 2020, Armen Sarkissian only noted that he was the chairman of the board of trustees at the Hayastan All-Armenian Fund (by virtue of office), the Yerevan My Love Fund, and also a member of the board of trustees at the Armenian General Benevolent Union (AGBU) and the Manukyan charitable foundation. The law on foundations states that the chairman, co-chairs, and other members of a foundation’s board of trustees are not considered as holding a position within the foundation and perform their duties without compensation on a voluntary basis, meaning there is no constitutional violation here.

The Criminal Code specifies penalties for those who present false information or conceal information that must be declared. Penalties may include fines ranging from 2 to 3 million drams or imprisonment for up to 2 years, during which time an individual may also be barred from holding certain positions or engaging in certain activities for a maximum of 3 years.