Criminal Charges Filed Against 8 Individuals, 5 of Whom are Officials from the RA Ministry of Economy: Details

The investigation into the apparent abuses during the procurement competition for the creation of the "Public Investment Program Bank" for the needs of the RA Ministry of Economy is ongoing at the Main Department of Investigation of Crimes Against the State, Constitutional Order, and Public Safety.

It has been established during the investigation that a two-stage competition was announced in 2022 for the purpose of creating the "Public Investment Program Bank," with four economic operators applying. Only two operators, Company "S" and Foundation "H," passed the pre-qualification phase and participated in the actual competition.

Extensive operational-investigative measures and secret investigative actions revealed that a group of officials from the RA Ministry of Economy, having a predetermined decision to declare Company "S" the winner at all costs, carried out actions, with the assistance of the company's director and employees, aimed at restricting competition and removing the competition of Company "S" from the contest.

Specifically, several officials from the Ministry of Economy had meetings and phone conversations with representatives of Company "S" during the competition, discussing the terms of the competition, even providing them with the documents submitted by the competitor Foundation "H" to the commission, and with their assistance, established new or modified conditions during the competition, under which the documents submitted by the Foundation could be deemed non-compliant, allowing for its removal from the competition.

Furthermore, these officials were aware before announcing the competition that the cost proposal from the Company would be around 700,000 USD equivalent in AMD, while knowing at different stages of the competition that the reasonable value for the procurement service for establishing the "Public Investment Program Bank" was around 300,000 USD equivalent in AMD. They continued to take actions aimed at ensuring the Company's victory at all costs.

It was also revealed that alternative proposals for acquiring the program at a more affordable price were submitted during the competition, but this proposal was not even discussed.

The investigation has established apparent evidence that two senior officials of the Ministry of Economy explicitly informed and reaffirmed to the director of Company "S" their position of removing the Foundation "H" from the competition and ensuring the victory of Company "S," then delivered to the employees of the company a package of documents submitted by the competitor Foundation "H" and received from them the company's conclusion on the Foundation’s non-compliance with the competition conditions, based on which the Foundation was removed from the competition during the commission meeting.

It has also been established that an employee and the director of the company, knowing that the victory of the Company in the competition was guaranteed and taking advantage of the fact that there was virtually no competition, inflated the project’s cost by 50,000 USD equivalent in AMD, and the company that was recognized as the winner in the competition offered a price equivalent to 1 million USD, more than 392 million AMD, while the illegally removed Foundation submitted a price proposal of 108 million AMD.

A claim has been filed by the Foundation against the Commission’s decision at the Court of General Jurisdiction of Yerevan, and by the court's decision on June 20, 2023, the decision declaring Company "S" the winner of the competition was declared invalid, and only on August 31, 2023, based on the court's decision, the Foundation was recognized as the winner of the competition in the commission meeting.

During the examination of the Foundation’s claim, as well as after the Court's approval of the claim, the officials of the Ministry continued to have meetings and discussions with the employees of Company "S," coordinating their actions with them, and even after the Foundation’s claim was satisfied, they discussed signing a contract with the Company, or, in case of impossibility, the need to annul the competition under the pretext of the necessity of the subject of procurement, ultimately aiming to conduct a new competition to ensure the unreserved victory of Company "S."

Moreover, even after the court's decision recognizing the Foundation as the winner in the competition, a senior official of the Ministry instructed his deputy and the head of the relevant department to submit a budget request of 400,000,000 AMD to the RA Ministry of Finance for the purpose of purchasing the project, which was carried out.

As a result of the described actions, significant damage has been caused to the legal interests of the Foundation and the state. In particular, the Foundation has been deprived of the right to participate in the competition conducted for the provision of the specified service under conditions of equality and without discrimination, despite having the indisputable grounds provided by law to win, the opportunity to provide services and generate profit, and has been forced to spend resources over time for the restoration of its violated rights and legal interests. Meanwhile, the state has so far been deprived of the possibility of creating a public investment program bank and thereby achieving more effective management and control over investments.

Criminal charges have been filed against a total of 8 individuals, of whom 5 are officials from the RA Ministry of Economy, and 3 are representatives of the commercial company. Currently, one of the latter is in pretrial detention.

Notice: The accused is presumed innocent until proven guilty by a court's ruling that has entered into legal force in accordance with the established procedure of the RA Criminal Procedure Code.