Charges Filed Against Former Minister Vahan Kerobyan

The already former Minister of Economy, Vahan Kerobyan, has been charged in connection with a criminal case regarding "Synergy." This was reported by News.am, citing its own sources.

Notably, the Investigative Committee also released a statement regarding the case, which states: "The investigation into the alleged abuses during the procurement process for the establishment of the 'Public Investment Programs Bank' for the needs of the Ministry of Economy continues within the framework of the Main Department for the Investigation of Crimes Against the State, Constitutional Order, and Public Safety."

According to the preliminary investigation, a two-phase competition was announced in 2022 to establish the 'Public Investment Programs Bank,' with four economic operators applying for participation. Of these, two operators, 'Synergy' and the 'Harmony' foundation, passed the pre-qualification phase and participated in the actual competition.

As a result of extensive operational and investigative measures, it was revealed that a group of officials from the Ministry of Economy, determined to declare company 'S' the winner at any cost, engaged in actions aimed at limiting competition and removing 'S's competitor from the contest with the assistance of the company's director and employees. In particular, several officials from the Ministry of Economy held meetings and telephone conversations with representatives of company 'S,' discussing competition conditions, even providing documents submitted to the commission by competitor 'H' foundation, thereby setting new or modified conditions under which the documentation presented by the foundation could be deemed non-compliant, allowing its removal from the competition.

Moreover, these officials knew beforehand that the company's bid would be around 700,000 USD equivalent in Armenian drams, while the reasonable value for the procurement of 'Public Investment Programs Bank' establishment services was approximately 300,000 USD equivalent in Armenian drams. They continued their actions aiming to ensure the company's victory at all costs.

Further investigation revealed that alternative proposals for acquiring the project at a more affordable price were submitted during the competition, but this offer was never discussed.

The preliminary investigation has established that two senior officials from the Ministry of Economy, prior to the meeting of the competition evaluation committee, explicitly conveyed and reaffirmed their position to the director of company 'S' to exclude foundation 'H' from the competition and ensure the victory of company 'S.' Following this, they handed the company's employees documentation submitted by competitor 'H' foundation and based on this received the company's conclusion regarding the foundation's non-compliance with the competition terms, which was used as a basis to exclude the foundation from the contest during the committee meeting.

Simplifying matters, company employees and the director, fully aware of the guarantees of success, took advantage of the lack of real competition and inflated the project budget by 50,000 USD equivalent in Armenian drams, with company 'S' being declared the winner with a bid of 1 million USD equivalent (over 392 million AMD), where as the eliminated foundation's bid was only 108 million AMD.

Against the decision of the committee, the foundation filed a claim in the civil court of Yerevan's first instance and on June 20, 2023, the court declared the decision to recognize company 'S' as the winner invalid. Only on August 31, 2023, did the evaluators' meeting recognize the foundation as the winner based on the court ruling.

During the processing of the foundation's lawsuit, as well as after the court's favorable decision, ministry officials continued their meetings and discussions with employees of company 'S,' coordinating their actions with them, and even under circumstances of the foundation's lawsuit being granted, they pursued the idea of signing a contract with the company, or if not possible, justifying the cancellation of the competition in light of the absence of the purchase object's necessity and launching a new competition to secure the company's unconditional victory.

Moreover, even after the court ruling recognizing the foundation as the winner, a senior ministry official assigned his deputy to submit a budget request of 400,000,000 AMD to the Ministry of Finance for the purpose of purchasing the program, which was carried out.

As a result of the described actions, significant harm has been caused to the legal interests of both the foundation and the state. In particular, the foundation was deprived of the right to participate in a fair and non-discriminatory competition with legal grounds and the opportunity to provide services and generate profits, forcing it to spend resources for an extended period to restore its violated rights and legal interests. Meanwhile, the state has been deprived of the opportunity to establish a public investment programs bank and, consequently, to undertake more efficient management and oversight of investments.

Charges have been filed against a total of eight individuals for these criminal acts, five of whom are officials from the Ministry of Economy, while three are representatives of the mentioned trading company. Currently, one of the latter is under preliminary detention.