Mystery surrounding family of former Armenian ‘super-minister’

Businessman Gurgen Khachatryan, chairman of the Board of Directors at the telecommunications company Ucom, and also co-founder of the Galaxy group, has gone on the run after becoming the central figure of a criminal investigation in Armenia.

The authorities accuse Khachatryan of abusing his position of power and embezzling an especially large sum of money.

It is still unknown exactly what section of the law he is being charged under. But it’s already clear that the charge against Gurgen Khachatryan is connected with the activities of his father, former Minister of Finance and head of the State Revenue Committee Gagik Khachatryan.

According to the investigation, Gagik Khachatryan’s sons created a company that won public tenders for information technology services with practically no competition, as they were helped by the structures headed by their father.

Gagik Khachatryan himself was arrested on charges of abuse of power and embezzlement on an especially large scale.

Now both father and son are accused of embezzling $3,000,000 in budgetary funds and of receiving a bribe in the amount of $22,000,000.

Gurgen Khachatryan says that the authorities are just trying to confiscate his Ucom shares.

Before he went into hiding, Gurgen Khachatryan publicly stated that the persecution was unlawful and said that he was being pressured “at the state level”.

On May 3, the court decided to arrest Khachatryan. But the court’s decision has not yet been implemented, as soon after, the defendant disappeared. The National Security Service of Armenia let him slip away.

Details on the accusations

On May 4, the National Security Service put Gurgen Khachatryan on the wanted list.

The report on the case gives specific figures of the damage caused to the state by the Khachatryan family.

Over the course of 12 years, from 2008 to 2020, the company entered into many profitable contracts.

In particular, as is stated in the National Security Service, the company purchased 19 “software modules at high prices.”

They cost the state 4,283,580,000 drams (about $8,000,000). Investigators say the real value was 2,777,410,417 drams ($ 4,500,000).

Investigators believe that the 1,506,169,583-dram discrepancy ($3,000,000) went straight into the pockets of the official’s sons.

To hide the source of the money and to launder it, the entire amount was cashed and transferred to Ucom through a third party.

In 2011, $22,400,000 was transferred to the account associated with the Khachatryans, and to conceal the transaction, the amount was written off as two loan agreements.

Khachatryan’s lawyers insist that these were indeed loans, that their term has not yet expired, and that the amount is subject to repayment.

The role of the Ucom company

Gurgen Khachatryan and his family own the majority of the shares in this telecom company.

On April 10, the founders of Ucom, brothers Hayk and Alexander Yesayan, voiced their disagreement with the development strategy pursued by other shareholders. This referred mostly to the Khachatryan family, although the company also has other shareholders with a smaller percentage of the shares.

The Yesayan Brothers themselves own only 6% of the shares. They tried to buy back the other 94% of the shares in order to gain control of the company. Having been refused, both resigned from their management positions within the company.

After some time, Gurgen Khachatryan stated that people were trying to take the company away from him and threatening to arrest him, and demanded that international organizations to look into his case:

“I was told very clearly that if I do not agree, they will accuse me of committing a particularly serious crime and arrest me. And then they will do the same to by my brother, other family members, relatives and loved ones.”

Gurgen Khachatryan did not specify who exactly was giving these threats.

However, a spokesman for the prime minister responded to his statement immediately.

On her Facebook page, Mane Gevorgyan wrote that the Khachatryan family had previously expressed their willingness to return the stolen funds.

“Gagik Khachatryan and his sons led the corrupt mafia system operating in Armenia for many years, as a result of which they illegally accumulated several hundred million dollars in state funds,” wrote Gevorgyan.

She says that because of this, if Gurgen Khachatryan sells his shares, the government believes that he should transfer the entire sum to the state budget of Armenia as compensation for the damage caused to the state during the years of his father’s work.

Where could Gurgen Khachatryan be hiding?

Khachatryan’s lawyers say that they do not know where Gurgen Khachatryan has hidden. At the moment, leaving Armenia is no simple task, as the borders were closed after the state of emergency was declared due to the coronavirus.