Surend Papikyan bought a $412,000 apartment for $168,000: who financed the deal?

The Minister of Defense, Suren Papikyan, has purchased an expensive apartment in Yerevan. The transaction took place in the summer of 2022. The deal for acquiring the apartment was financed by the “Hayekonombank,” which belongs to the family of MP Khachatur Sukiasyan. The building that houses the minister's apartment is being constructed by Ashot Arsenyan, a former MP enjoying the support of the current government.

“Hetq” has uncovered details concerning the real estate acquisition transaction. Minister of Defense Suren Papikyan, along with his wife Armine Muradyan, has purchased a new apartment that has yet to be put into operation. The newly built building is located at 18/4 Arshakunyats Avenue, in the newly formed “Byuregh” residential district. The building is fully constructed, with facade and interior work currently underway.

According to data received from the Cadastre Committee, the right to purchase an apartment in the under-construction building was registered in the names of Suren Papikyan and Armine Muradyan on July 27, 2022. “Hetq” also managed to establish through another source that the apartment in the new building is 165 square meters, and the price of the transaction amounted to 69 million drams. This amount, based on the average exchange rate set by the Central Bank at the time of the purchase, corresponds to $168,000 (1 USD equal to 410 drams). This means the cost per square meter as of July 27 was $1,019.

We spoke with potential buyers wishing to acquire an apartment in the “Byuregh” residential complex, who informed us that in 2020, prior to the war, when real estate prices were lower, the price per square meter in the mentioned complex started at $1,200 (with lower floors priced starting at $1,100). Currently, the price per square meter in the “Byuregh” residential complex begins at $2,500.

Given these conditions, Suren Papikyan's acquired property is valued at 169 million drams, approximately $412,000, but the minister bought it for 69 million drams ($168,000).

We sent a written inquiry to Defense Minister Suren Papikyan, asking him to clarify how he managed to purchase the apartment for nearly 100 million drams less. The minister replied in writing that he purchased the apartment in July 2022 using credit funds from “Hayekonombank.” “In response to your question regarding the market price of the mentioned apartment, I must mention that for more precise information regarding the market price of the apartment, it is necessary to contact the company engaged in the sale of the residential building,” Suren Papikyan stated, effectively not clarifying the circumstances of the successful deal.

To obtain clarification, we also sent a written inquiry to the director of the company constructing the “Byuregh” residential complex, “Jermuk Group” LLC. Since we were unable to get a specific answer from a company representative over the phone regarding when they would respond to our questions, we decided to publish the material. We will also publish the response when we receive it.

Who built the apartment and who financed the deal for an apartment valued at $412,000 purchased for $168,000 is likely linked to the involvement of another individual in the transaction, Ashot Arsenyan. The residential and public complex located at 18/4 Arshakunyats Street in Yerevan's Kentron administrative district is being built by “Jermuk Group” LLC, which belongs to former MP Ashot Arsenyan. Ashot Arsenyan served as a member of parliament from 2003 to 2012, having belonged to the Republican Party led by Serzh Sargsyan. However, everything changed after 2018.

In 2019, “Jermuk Group” donated snow-clearing vehicles to the Yerevan Municipality and subsequently received permission to construct a high-rise residential complex on Arshakunyats Avenue. That same year, a criminal case was opened regarding the circumstances concerning the release of Arsenyan's son, Vahagn Arsenyan, from military service, which was soon closed. By October 2021, Vahagn Arsenyan was appointed as the acting head of the Jermuk community by Prime Minister Nikol Pashinyan. The acting head was half a step away from becoming the community mayor. In the local elections of December 5, 2021, “Civil Contract” emerged victorious, and Vahagn Arsenyan, leading the CP's list, became the head of the enlarged Jermuk community.

The purchase transaction for the minister's apartment was financed by “Hayekonombank” LLC, more than half of whose shares belong to the family of MP Khachatur Sukiasyan from the “Civil Contract” faction. According to the bank's official website, 57.52% of the bank's registered and fully paid capital belongs to the Sukiasyans. Incidentally, “Hayekonombank” also financed the purchase of the residence of Foreign Minister Ararat Mirzoyan, which amounted to $280,000. In 2019, when Suren Papikyan was the Minister of Territorial Administration and Infrastructure, he acquired an 86 square meter apartment in a newly constructed building on Adonts Street in the Arabkir administrative district. The cost of the apartment was 27 million drams. That same year, Suren Papikyan took out loans from two different banks. He borrowed 18.7 million drams from “Ardshininvestbank” and 1.85 million drams from “VTB-Georgia” Bank. When acquiring the apartment, the official took advantage of the exemption established by the ‘income tax return’ regulation.