Hrazdan Stadium Sold for Approximately 200 Times Below Market Value

The Prosecutor General's Office has investigated the privatization process of the property of the Hrazdan Sports Complex LLC within the framework of its authority to file claims for the protection of state (community) interests. The examination revealed that the entire property of the Hrazdan Sports Complex LLC, which has a 100% state share, was leased in 2001 under a rental agreement. This property includes the Hrazdan Stadium located at 4 Hrazdan Gorge, Yerevan, comprising approximately 62,000 square meters of buildings and a land area of 14 hectares, which was leased to the Hrazdan Sports Complex Rental Enterprise LLC (hereinafter referred to as the Company).

A portion of the leased property, including a land area of 10.4443 hectares and buildings covering 61,660.3 square meters (the sports complex, the Hrazdan Stadium), was sold outright to the lessee, Hrazdan Sports Complex Rental Enterprise LLC, through Government Decision No. 1333-N dated July 22, 2004. The sale price was set at 87 million 520 thousand dram (there was no justification found for this amount in the study materials; the proposal for a realistic evaluation by a qualified independent appraiser from the Minister of Finance and Economy was not taken into account).

The basis for the government's decision was data provided by the State Property Management Department, indicating that under the rental agreement concluded in 2001, more than 900,000 US dollars had already been invested. However, according to the data obtained from the State Property Management Committee during the Prosecutor General's investigation, there is no record of the Company making a 900,000 US dollar investment between 2001 and 2004; there are also no records of any acts or written details regarding capital investments presented by the lessee to the lessor.

On January 7, 2005, by the decision of the Company’s general meeting, a shareholder, A.A., took on obligations under the state property privatization agreement signed in 2004, committing to invest 2 million US dollars by 2009 (investments made by A.A. were considered accepted by the State Property Management Department).

In 2010, the Company was renamed Hrazdan Central Stadium LLC, from which the shopping center Europark LLC and Solidus LLC were later separated. In a ruling dated 2015, the General Jurisdiction Court of the Center and Nor Nork-Marash administrative districts recognized Hrazdan Central Stadium LLC as bankrupt, and in 2019, liquidation proceedings were initiated against the Company.

Taking into account that the government sold the Hrazdan Stadium—worth an estimated market price of approximately 11 billion 558 million dram at that time, with a current cadastral value approximating 16 billion 127 million 253 thousand dram— for only 87 million 520 thousand dram based on unreliable data provided by officials, the prosecutor has filed a report of a crime with the Anti-Corruption Committee. On February 10, 2024, a criminal case was initiated with the Anti-Corruption Committee under Article 441, part 2, clause 2 of the Criminal Code (misappropriation of official powers or related influence) and Article 445, part 2 (official forgery).