State Suffered $10 Million Loss Over 10 Years

According to a decision by the government on April 21, 2005, the property assigned to the "Hamo Beknazarian Named "Hayfilm" Film Studio" State Non-Commercial Organization was sold to "Armenia Studios" LLC through a tender for 350 million drams. This was reported by the Prosecutor General's Office of Armenia.

An investigation conducted by the Public Interests Protection Department revealed that a contract was signed on September 14, 2005, between the Republic of Armenia and "Armenia Studios" LLC, transferring ownership of buildings and cinema production equipment covering an area of 24,292.6 square meters, located at 50 Chayushi St., Yerevan, to the company.

Under the contract, the obligations undertaken by "Armenia Studios" LLC were transferred to "CS Films" LLC, established on September 4, 2005, which was renamed to "Hamo Beknazarian Named "Hayfilm" Film Studio" LLC on October 10, 2008.

The contract stipulated an investment of 30 billion drams, of which at least 10 billion drams were to be invested by the "Hamo Beknazarian Named "Hayfilm" Film Studio" LLC within 10 years. The deadline for fulfilling these obligations was set for December 31, 2014, with a reporting deadline of March 31, 2015. The contract also required that during the investment period, the investor must have a guarantee letter from "Northern Trust" for an amount of $10 million.

From 2006 to 2009, "Hamo Beknazarian Named "Hayfilm" Film Studio" LLC made an investment of 748 million drams, and a report was submitted for 2010-2011 that lacked proper justification. The State Property Management Committee made numerous requests for additional documentation from the investor, which were not met.

Thus, over approximately 10 years, under the nominal fulfillment or non-fulfillment of the obligations undertaken by "Hamo Beknazarian Named "Hayfilm" Film Studio" LLC, the officials of the State Property Management Committee, due to negligent or careless attitude, did not take measures to claim the $10 million from the guarantor for the unfulfilled investment obligations as stipulated by the contract, resulting in a loss of $10 million to the state.

As a result, the government's decision numbered 1050-A from August 31, 2015, terminated the contract signed on September 14, 2005, the value of the property specified in the contract—350 million drams—was returned to the buyer, and the 100% shares of "Hamo Beknazarian Named "Hayfilm" Film Studio" LLC were recorded as property of the Republic of Armenia.

The investigation also revealed that from 2005 to 2016, cultural property valued at 2 million 658 thousand 220 drams was stolen from the assets of "Hamo Beknazarian Named "Hayfilm" Film Studio" LLC. Given that instances of apparent offenses committed by officials of the State Property Management Committee, as well as cases of cultural property theft were identified during the investigation, a report of the crime was submitted to the Investigative Committee on July 3, 2023.

A criminal case has been initiated by the Investigative Committee under Article 446, Part 2 (official negligence), Article 254, Part 3, Clause 3 (theft involving items of historical, artistic, or cultural value), and Article 447, Part 1 (illegal occupation of state or community property land, as well as failure to take legally prescribed measures to halt unauthorized construction of buildings or structures or to hold individuals liable).