Head of large freight company arrested in Armenia for tax evasion

Head of Armenian freight company Spayka, David Ghazaryan, was arrested earlier today after the country’s State Revenue Committee accused the company of trying to avoid paying 7.35 billion AMD ($15 million) in taxes.

Ghazaryan denies the charges.

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What has the company been accused of?

The State Revenue Committee of Armenia carried out an audit which showed that in 2015-2016, Spayka had imported goods under false VAT and customs-exempt categories, thereby avoiding a payment of $15 million in taxes to the state.

A similar case was opened against Spayka last year for “non-payment of taxes on a large scale”. At the time, the company repaid about two billion drams (more than four million US dollars) to the state treasury.

The company said at the time that it did not agree with the prosecution. It did not, however, demand that a recalculation be done, and paid the amount in order to avoid a complete company shutdown. Now, Ghazaryan says, the State Revenue Committee has again decided to force the company to pay an even larger amount.

How the company has responded

Ghazaryan called an urgent press conference after the State Revenue Committee’s announcement and declared that he did not agree with the accusation. He said that he had nothing to do with Greenprodukt – the company for which Spayka was allegedly importing the goods in question – and that this criminal case was a fake:

“The State Revenue Committee carried out inspections at Greenprodukt and decided to connect us [to the case.] They claim that we … are its real owner. This is a lie.”

The head of Spayka also said that the company has lost a $100 million in investments from the Eurasian Development Bank because of the criminal case. Ghazaryan says hundreds of jobs would have been created had the investment gone through.

“Last night I received a call from the Eurasian Development Bank. I was informed that funding would be temporarily suspended because a criminal case was opened against us.”

Ghazaryan also stated that if he was arrested, the company would continue its activities, but would not buy apricots from farmers.

The Armenian media reports that Spayka practically has a monopoly on the export market of Armenian apricots. The procurement season is approaching, and the statement of the head of the carrier company has become a cause of serious concern for Armenian farmers.

After the press conference, the court agreed with the petition of the State Revenue Committee to arrest David Ghazaryan.

Spayka workers react

Immediately after the State Revenue Committee released its statement on tax evasion and the petition for the arrest of the head of the company, hundreds of Spayka employees said they did not want to lose their jobs and came out in defence of their leader.

A powerful protest was held in front of the court building where the decision was made to arrest David Ghazaryan. The protesters blocked the road and demanded other solutions to the issue.

After the court finally decided to arrest the head of the company, Spayka employees moved to the government building. They demanded a meeting with Prime Minister Nikol Pashinyan.

What is Spayka

Spayka is currently the largest freight transportation company in Armenia, and has been so for many years.

The company also established the production of greenhouse products and cheeses.

Armenia’s media have repeatedly written that Spayka belongs to the family of the second Armenian President, Robert Kocharyan. Michael Minasyan, the son-in-law of the third president Serzh Sargsyan, also allegedly has a large share in the company.

The head of the company denied these rumors during his press conference.