On 10 February, the RA Minister of Territorial Administration and Infrastructure Gnel Sanosyan announced at the sitting of the tender commission established by his order, the commission summed up the results of the tender announced for the alienation of the “Golden Palace” hotel complex in Tsakhkadzor, Kotayk region. The hotel complex was bought by “Project Inter-Invest” LLC for 5 billion drams, presenting an Investment Program for additional 4.5 billion drams during the next 5 years. This company was the only bidder in the announced tender.
About “Project Inter-Invest” LLC and its owner Narek Nalbandyan
Iravaban.net reports that according to the data received from the state register, Narek Nalbandyan is the owner of 100% of shares of “Project Inter-Invest” LLC since 2019.
According to the data provided by Minister Gnel Sanosyan, as of 29 October, 2021, the estimated market value of the property was:
- Real estate (including market value of the land plot) – 5,602,293,000 AMD,
- 3,257 units of movable property inside the constructions and buildings – 305,757,000 AMD.
It was also provided that the set minimum price, 5 billion drams, is subject to equal payment within 5 years.
That is, the company must make the payment according to the following schedule ․
- 1st installment – one month after summarizing the results of the tender, including the 250 million AMD prepayment of the tender,
- 2nd installment: no later than 1 July, 2023
- 3rd installment: no later than 1 July, 2024,
- 4th installment: no later than 1 July, 2025,
- 5th installment: no later than 1 July, 2026.
An announcement about the purchase was also published on the Facebook page of the Company on 11 February.։
It should be noted that according to the company’s website, “Project Inter-Invest” LLC:
- Is one of the largest producers of flour in Armenia․ The factories are located in Masis and Artashat (“Nalbandyan Flour”),
- Carries out international cargo transportation with more than 200 trucks of its own fleet of vehicles,
- “Truck Service” service center for truck is the largest in Armenia.
A study of the Facebook page reveals that the Company is also engaged in egg production (“Shirak” Poultry Factory).
According to the information received from the state register of legal entities, Narek Nalbandyan also owns:
- “Nor Lusakert” LLC – 100% share,
- “MAN Holding” LLC – 100% share,
- “MAN PAINTS” LLC – 25% share,
- “MAN PAINTS” LLC – 51% share,
- “MAN Trans” LLC – 51% share,
- “MAN TANTS 1” LLC – 100% share,
- “NN Holding” LLC – 100% share,
- “NN Trans” LLC – 100% share,
- Yeghvard Compound Feed Factory LLC – 50% share.
About “Golden Palace” Hotel
Back in October 2018, the National Security Service reported that a criminal case was initiated in the NSS Investigation Department on the case of illegal participation in business activities by the former chairman of the RA State Customs Committee Armen Avetisyan and money laundering in a particularly large amount, provided for in Article 310 and Article 190, Part 3, Clause 1 of the RA Criminal Code.
According to the preliminary data obtained as a result of operative-intelligence measures and investigative actions taken by the NSS, Armen Avetisyan, having held the position of the Chairman of the RA State Customs Committee since 2001, together with people who were in business relations with him, undertook and financed the construction of the “Golden Palace” Hotel Complex on Azatutyan Avenue in Yerevan, mostly in cash. Having the aim to cover the involvement of himself and others, as well as the source of funding of the construction of the hotel, it was attributed to “Riverhill Holdings” LTD, which was established and based in Cyprus offshore zone. Thus misleading the public that the millions of dollars spent on the construction of the hotel are allegedly a foreign investment in Armenia. Armen Avetisyan personally supervised the construction process, using his official position, in certain cases also contributed to the solution of various problems that arose during the construction of the hotel.
Expanding the hotel business, the “Golden Palace” hotel was constructed in Tsakhkadzor in 2010-2012 on behalf of the same organization. In 2012 “Golden Group Limited” CJSC founded in Douglas, England became the owner of the above mentioned two hotels. Armen Avetisyan’s son Artashes Avetisyan, was the owner of 100% shares of that company.
Later, in 2018, Armen Avetisyan and his son founded the third hotel, “Golden Palace Boutique”, on Northern Avenue in Yerevan.
By the way, the total market value of the above three hotels in 2016 was estimated at about $ 90 million.
In 2019, this case was terminated.
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On 28 November, 2018, during a pre-election campaign in Tavush Marz, Acting Prime Minister Nikol Pashinyan announced that the family of former head of the Customs Service Armen Avetisyan applied to the State Property Management Committee and reported that the “Golden Palace” Hotel in Tsakhkadzor had been donated to the state.
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At the September 26, 2019 sitting, the Government adopted a decision on the buildings at 34/1 Tandzaghbyur Street, Tsaghkadzor, Kotayk Marz, Republic of Armenia, at the estimated market value of 7,526,457,800 AMD, as of 19.04.2019 and 11.06.2019, owned by “Golden Palace” Limited Liability Company located at 19,758 sq.m., and the 1.38 hectare land allotted for their use and maintenance, as well as the movable property inside the building as a donation to the Republic of Armenia.
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In October 2019, it was announced that the state would sell the hotel. Already in November, at the government session, a decision was made to alienate the buildings of the “Golden Palace” Hotel Complex, which is attached to the State Property Management Committee and is a state property, through a classic auction as one lot. As of 20 November, 2019, the estimated value of the property was 7,526,457,800 AMD (of which, the estimated value of the buildings was 7,204,568,800 AMD, the value of the movable property was 321,889,000 AMD), and the cadastral value of the 1.38 hectare land plot occupied by the property, allocated for use and service, was 62,431,200 AMD.
The starting price of the property subject to alienation by auction in the amount of 100% of the assessed value is 7,526,457,800 AMD. The decision also stipulates that the buyer must also pay the amount intended for determining the value of the property: 4,944,600 AMD (including VAT). It is also planned to organize three more auctions for the sale of property not sold during the first auction, reducing the starting price of the sale of property at each regular auction by 5% of the starting price of the last auction.
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The first auction of the “Golden Palace” hotel was scheduled for 18 December, 2019, which was announced by the head of the State Property Management Committee.
On 18 December, it became clear that the planned auction would not take place, as no bid had been registered before the deadline (yesterday at 18:00). “It follows that in the next stage, the starting price of the auction will be 5% lower, and we will provide additional information about the date,” the head of the State Property Management Committee said.
The next auction was scheduled for 21 February, 2020. According to the SPMC, the starting price of the buildings of the hotel complex with an area of 19․758 sq.m., 1.38 ha of land, as well as 3․257 units of movable property was set at 7,150,134.910 AMD.
Regarding the last auction, as a result of which the hotel complex was sold, it was mentioned in the SPMC announcement that the sale price of the property subject to alienation is 5,000,000,000 AMD, the prepayment amount is 250,000,000 AMD. The value of the alienation property is subject to payment in the currency of the Republic of Armenia equally for 5 years, according to the schedule.
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We learn from the website of the RA State Property Management Committee that according to SPMC Chairman Arnak Avetisyan:
- The building will continue to be used as a hotel,
- If the investment obligations are not observed, the state can impose fines,
- 30% of each payment will be transferred to the budget of Tsakhkadzor enlarged community of Kotayk region, which makes 300 million drams in total.
It should be noted that several issues follow from all this and in all issues a line that goes like a red thread: the state has suffered. In particular:
- The state received the “Golden Palace” Hotel as a donation at a market value of 7,535,889,000 AMD (as of 11 June, 2019). The sale was made for 5 billion drams, that is, the state has lost 2.5 billion 889 thousand drams.
- The working business, the hotel, has stopped its activity for about 3 years, during which no taxes were entered into the state budget from the possible income.
- Why did Armen Avetisyan decide to donate the hotel to the state, after which the criminal case against him was terminated? Why haven’t law enforcement investigated the possible corruption risks of the donation deal so far?
- In addition to the fact that the hotel was sold for about 2,5 billion less, it was also given with the possibility of installment purchase. In fact, the state budget could receive 7,5 billion drams, while with the first entry the state budget will receive only 1 billion drams.
Although it is mentioned that the buyer has presented an additional investment program of 4.5 billion drams during the coming 5 years, it turns out that Narek Nalbandyan will pay 1 billion drams to the state in the first year. By making the investment, he will be able to make a profit now and pay the remaining 4 billion drams from that profit in the next 5 years. And from the 4 billion drams to be paid in purchase installments make investments. As a result of which it will turn out that the hotel, we can say, was actually given as a “gift”.
- In general, this whole chain, after the final purchase, should be examined by law enforcement from the point of view of studying possible corruption risks, as well as the possible interconnection of the hotel buyer Narek Nalbandyan with the representatives of the political authorities.
Alisa Chilingaryan
