While the question whether Gagik Tsarukyan, leader of Prosperous Armenia party, was engaged in illegal entrepreneurial activity and the grounds for stripping him of his parliamentary mandate were being discussed in April-May this year, the PAP leader established new companies in the same period being a shareholder thereof.
Tsarukyan is not involved in business – he has handed over his businesses for confidential management
On April 29, the “Citizens’ Decision” Social-Democratic Party appealed to the Prosecutor General’s Office demanding that PAP faction leader Gagik Tsarukyan be stripped of his mandate and prosecuted.
This process was based on Tsarukyan’s multiple verbal statements which allowed thinking that Tsarukyan was personally involved in managing his businesses. One such example was the situation around Ararat Cement Factory, where Tsarukyan’s statements showed that he was personally in charge of managing the company and its policy.
The Speaker of National Assembly Ararat Mirzoyan called on Tsarukyan to dispel suspicions on illegal entrepreneurship, in response to which Tsarukyan, citing the law, announced that his shares in commercial companies had been handed over for confidential management.
On May 14, the Special Investigation Service rejected the criminal case against Tsarukyan on the grounds of absence of an element of offense. But while these discussions were going on, new companies were registered with Tsarukyan’s participation.
“Tsarukyan cotton road”- new company with old cotton maker
On April 11 this year, Tsarukyan Cotton Road LLC was established. 70% of the company is owned by Gagik Tsarukyan, 20% by Gagik Khachikyan, 5% by Syrian businessman Ammar Sabaghin, and 5% by French citizen Fawzi Akfalin. The company has established cotton fields on the banks of Araks river. It also intends to organize export and create knitwear production. Tsarukyan’s “Kentron” TV company regularly presents the company’s activities. Reportage aired on May 17, for instance, repeatedly suggests that foreign investors would not have invested if it wasn’t for Tsarukyan.
Tsarukyan’s partner Gagik Khachikyan is not new to cotton industry. He has managed to appear in the focus of a series of scandalous incidents. Civilnet had found out that Khachikyan had established “Uzbek Textile Group” a year before hiring Tajiks later refusing to pay some of them. Tajiks held several protests, got paid after the clamor and left Armenia.
Civilnet had also written that Khachikyan was the owner of the “Tsovazdr Textile Factory” which did not fulfill large credit obligations. By the way, Khachikyan was twice found guilty of falsifying documents and illegally crossing the border. He was fined both times for the same thing.
The official website of the public announcements informs that the newly established company has already managed to accumulate tax debts. On June 24, the State Revenue Committee notified “Tsarukyan Cotton Road” of tax liabilities not fulfilled by more than 4.8 million drams.
Tsarukyan’s new companies
On June 4, Gagik Tsarukyan established two new companies – “Multi Trucks” and “Multi Propane Gas.” The sole shareholder of the former is Tsarukyan while the director is Sedrak Arustamyan, the director of Tsarukyan’s “Multi Group.” The office is located in Tsarukyan’s “Ararat” wine-brandy-vodka factory building. It is not possible to find out what exactly “Multi Trucks” is doing with the taxpayer search system.
It is also not possible to find out what PAP leader’s other company “Multi Propane Gas” is doing with the same system. Tsarukyan’s stake in the company is 50%. The remaining 50% belongs to Ukrainian citizen Hovhannes Hovsepyan. He is the president of the Armenian National Boxing Federation. This organization was created to counter balance the Armenian Boxing Federation (headed by Arthur Gevorgyan, son-in-law of former chief of police Vladimir Gasparyan).
On June 17, the PAP leader established another company “Multi Trade House.” Tsarukyan has 70% stake there. The remaining 30% belongs to Stepanakert resident Dmitry Sarkisyan.
The “Gold Silver Chain Company” was established on July 15. There are no data on this company in the taxpayer search system. The shares are divided by 50/50 ratio. Besides Tsarukyan, another stakeholder is “Rose Invest” LLC registered in the offshore zone of Cyprus
Does Tsarukyan violate the Constitution?
Article 95 of the Constitution unequivocally prohibits MP from doing business. Moreover, the definition of the term “business activity” given by the Law on Public Service and the Civil Code virtually implies that the registration of a legal entity pursuing profit is also business activity.
The “Law on the Activity Guarantees of the RA National Assembly Deputy” stipulates that “within one month after receiving the mandate the deputy shall withdraw from the state registration of an individual entrepreneur, be dismissed from a position in a commercial organization, leave commercial organizations or hand over the share in statutory capital of commercial organizations for confidential management.”
In other words, confidential management refers to businesses that an MP could have before being elected (when he/she had the right), while after being elected the MP has no right to establish a business. This is why the law does not even provide for any mechanism for confidential management for businesses created while being an MP. Thus, establishing new companies by Tsarukyan is in direct contradiction with the Constitutional requirement.
As compared to activities in business, Gagik Tsarukyan has been passive in his activities as a deputy. According to the Parliament monitoring website, Tsarukyan has not come up with a legislative initiative in the 7th convocation of the National Assembly so far. He was absent 82 times out of 191 times of voting. The law stipulates that the duties of a deputy shall prevail over any other work activity performed by the deputy. And though the MP has not come up with a legislative initiative, he seems to have no restraint on business initiatives.