Economy 16:14 25/01/2023 Armenia

Corrupt deal of the year: Donation of ZCMC shares to Armenian government remains unclear

The issues concerning the transfer of the Zangezur Copper Molybdenum Combine (ZCMC) shares to the Armenian government, one of the shadiest deals in the history of independent Armenia, remain up in the air.

It remains unclear how the government cut a deal with the mining giant, which is Armenia’s largest taxpayer, as its details have not been publicly disclosed.

It all started back on 30 September 2021, when it emerged that the Industrial Company JSC, a wholly owned subsidiary of Russian billionaire Roman Trotsenko’s GeoProMining Gold, acquired 60% of ZCMC and immediately donated a quarter of that stake to the Armenian government. Thus, Prime Minister Nikol Pashinyan’s government got hold of 15% of ZCMC’s stock.

Incidentally, the Industrial Company had never been listed among the shareholders of the mining company. It became a ZCMC shareholder on September 30, when 15% of its ZCMC stake were granted to the government.

Pashinyan's statement and changes in ZCMC

Campaigning for the June 2021 parliamentary elections, Nikol Pashinyan vowed to punish ZCMC’s “owners” for harassing its employees and make sure that their shares are “returned to the people” as parts of a “steel revolution” which he said would start from Syunik Province.

“Employees of the Zangezur Copper Molybdenum Combine have been threatened with dismissal if they attend [Pashinyan’s] rallies. I promise you now that none of those threatening you will have worked at ZCMC by mid-July. It's enough that some bashibozouks remained in charge of the Zangezur Copper Molybdenum Combine," Pashinyan said at an election campaign in the town of Kajaran on 15 June.

He also revealed some secrets. "I would like to reveal a secret; now negotiations are underway in this regard and I hope that some will take a constructive stance. Otherwise, the Armenian people shall get back their shares in the Zangezur Copper Molybdenum Combine from those bashibozouks, even under the nationalization law."

The ZCMC deal was struck not long after his statements.

Here’s another striking circumstance. Decision No. 270-А of Armenia’s Competition Protection Commission dated 29 September 2021 reveals that the commission allowed the concurrence of the Zangezur Copper Molybdenum Combine and the Industrial Company. It was based on a June 15 application submitted by the two companies, which said the Moscow-based Industrial Company sought to acquire around 60% of ZCMC’s stock.

Thus, the Competition Protection Commission received the application on the same day when Nikol Pashinyan told his supporters in Kajaran that "the Armenian people will regain their shares in the Zangezur Copper Molybdenum Combine.”

Subsequently, the government handed over its 15% stake in ZCMC to the trust management of the Armenian National Interests Fund (ANIF). Strikingly, ANIF Board of Directors is led by Armenia’s former Deputy Prime Minister Tigran Avinyan.

A number of economists, politicians and media outlets sounded the alarm about this non-transparent deal. Moreover, the media asked the government to provide a copy of the donation agreement, however the latter rejected the request, citing “commercial issues” concerning the transfer.

CivilNet and the Transparency International Anti-Corruption Center next filed a lawsuit in the Administrative Court in December 2021, asking the court to oblige the government to publicize the deal.

Earlier in October, Varuzhan Hoktanyan, Project Director at the Transparency International Anti-Corruption Center, told Pastinfo that the deal to sell 60% of the ZCMC shares to Roman Trotsenko was not transparent and no further clarifications were provided.

"It’s unclear why GeoProMining was kind enough to donate 15% of its stake to the government. In turn, the government justified the deal claiming that its role in the distribution and use of the ZCMC profits, as well as in its further development will increase. Basically, it’s not a bad objective, but the question is whether those claims correspond to reality or not," Hoktanyan said.

He also called out the transfer of the shares to the prime minister’s office rather that the Ministry of Economy, which, Hoktanyan claimed, was a more competent agency.

"This is yet another evidence of the concentration of power, because it it’s clear why the stake was granted to the prime minister's office. Everything is concentrated in the hands of the prime minister's staff. If it continues like this, there will be no need for ministries, since they will emerge into departments of the prime minister's office," Hoktanyan stated.

Addressing the parliament on 6 October 2021, Pashinyan excitedly announced GeoProMining’s plans to build a copper smelter and a nuclear power plant in Armenia thriugh new investments, which essentially remained up in the air.

Incidentally, even Armenian politician Aram Sargsyan, who is a close ally of Nikol Pashinyan, called the deal reckless. "A Russian investor comes to Kajaran and says he will invest $3 billion there. However, a maximum of $800 million is needed to build a metal smelting plant," he stated.

Later on 24 August 2022, the Armenian government endorsed a draft decision to hand over 6.8% more stake in ZCMC to ANIF for management. Pashinyan revealed at a weekly cabinet meeting that the firm called AMP Holding secretly donated its 6.8% stake to the government in March. The premier said AMP asked the government at the time not to publicize the transfer due to “commercial issues.”

“Now they have no need for secrecy, and we are handing over that 6.8% stake to ANIF for management. Starting from March 24, the Armenian government holds a 21.875% stake [in ZCMC], which is a crucial development,” Pashinian said.

The decision said that Armenia would more effectively manage its shares in the company through ANIF which could create a long-term joint vision and opportunities between the state and the company's shareholders for business development and economic benefits for Armenia.

ANIF and transparency

Was ANIF transparent at work? The media can best answer this question, as their requests to ANIF were mostly ignored or they received vague answers after several warnings.

Panorama tried to obtain any information on the Zangezur Copper Molybdenum Combine from the ANIF website. There were just two reports regarding ZCMC: The one revealed the transfer of the government’s stake in ZCMC to the fiduciary management of ANIF, while the other said ANIF “will no longer manage the shares owned by the government.” No other data was available.

Pastinfo also reported the issue, saying it could not reach the Italian and French members of the ANIF Board of Directors as well as Chairman of the ANIF Investment Committee Khaled Helioui to get answers to a number of controversial questions.

ANIF proposed the news outlet to send the requests to them, promising to forward them to the addressees. "We have not heard back from the addressees, thus we can assume that the questions have not been passed to them,” Pastinfo said.

It comes to show that ANIF’s foreign leaders are not authorized to provide any information on the management of the ZCMC shares. In other words, ANIF has adopted a policy of restricting and obstructing the media's right to access information, which is repeatedly reported by Pastinfo, GivilNet, and other media outlets.

It could not go without consequences

A few months after the government transferred its 21.8% stake in the Zangezur Copper Molybdenum Combine to ANIF, it made another decision.

At a meeting on 22 December 2022, the government approved a decision to hand over its 21.9% stake in ZCMC to the State Property Management Committee, without giving any reason.

It only cited the need for a “more institutional approach” to its involvement in the corporate management of the company. No other details were available.

Referring to the matter, Pastinfo writes: "Serious discussions were held at ANIF, as some foreign members were concerned that their names were affected in the management of shares acquired through a highly suspicious corrupt transaction, which could negatively affect their ratings.”

It all comes under the government whose leader, Nikol Pashinyan, came to power on a promise to promote “transparency and openness”.



Source Panorama.am
Share |

Newsfeed

17:05
EU leaders visit Kyiv, pledge support for Ukrainian people
European Union leaders arrived Thursday in Kyiv with a message of support for the Ukrainian people, while Ukraine’s president warned of a...
16:42
Unique exhibition marks Armenian novelist Alexander Shirvanzade's 165th anniversary
A unique temporary exhibition has been launched at the Museum of Literature and Art after Yeghishe Charents in Yerevan to mark the 165th...
16:10
Armenian politician deplores Lavrov's remarks
Armenian politician Artur Ghazinyan, a former MP from the opposition Hayastan bloc, took to social media on Thursday to deplore Russian Foreign...
15:35
Australian legislators call out government for failure to denounce Azerbaijan’s Artsakh blockade
Legislators from across Australia have written directly to the Australian Foreign Affairs Minister, Senator Penny Wong, raising concern over...
15:15
Russia made no request for CSTO assistance in Ukraine, Lavrov says
Russia has made no request to member states of the Collective Security Treaty Organization (CSTO) for assistance in the special military...
15:00
Converse Bank receives its second award this year
Converse Bank’s activities once again have been highly appraised by our international partner. Based on our activities in 2022, the Bank...
14:45
Joe Biden's home searched by FBI
No classified documents were found during an FBI search of President Joe Biden's home in Rehoboth, Delaware, his lawyer says. In a...
14:30
ICRC helps transfer six more seriously ill patients from Artsakh to Armenia
The International Committee of the Red Cross (ICRC) has facilitated the transfer of six more severely ill patients from Artsakh...
14:15
ARF leaders meet with French ambassador
ARF Bureau member Armen Rustamyan and ARF Armenia Supreme Body chair Ishkhan Saghatelyan on Thursday met with French Ambassador to Armenia Anne...
13:55
Lavrov reiterates Russia's proposal to send CSTO mission to Armenia-Azerbaijan border
The proposal to deploy a mission of the Collective Security Treaty Organization (CSTO) on the border of Armenia and Azerbaijan is standing, it...
13:44
Rep. Linda Sanchez condemns Azerbaijan's Artsakh blockade
U.S. Congresswoman Linda Sanchez has condemned Azerbaijan's blockade of Artsakh (Nagorno-Karabakh) and urged the Biden administration to...
13:23
Health minister: Lives of Armenian soldiers injured in barracks fire not in danger
The lives of the Armenian soldiers injured in a military barracks fire on 19 January are not in danger, Health Minister Anahit Avanesyan told...
12:48
Former Armenian NPP chief charged with misappropriation
The former director general of the Armenian Nuclear Power Plant (NPP), Gagik Markosyan, has been charged with misappropriation of funds worth...
12:15
Two garbage collectors stabbed in Yerevan last night, deputy mayor says
Two garbage collectors employed by the Yerevan Municipality were stabbed while performing their work in the Avan-Arinj district last night,...
11:45
U.S. to remain deeply engaged on Armenia-Azerbaijan settlement – State Department
The United States will remain deeply engaged on the settlement between Armenia and Azerbaijan, State Department spokesperson Vedant Patel told a...
11:32
Armenia's Pashinyan off to Kazakhstan with spouse
Armenian Prime Minister Nikol Pashinyan, together with his wife Anna Hakobyan, left for the Republic of Kazakhstan on a working visit on...
11:24
U.S. names new senior advisor for Caucasus negotiations
U.S. Secretary of State Antony Blinken on Wednesday announced the appointment of Louis L. Bono as new senior advisor for Caucasus negotiations....
11:05
Senator Menendez slams Commerce plans to permit export of lethal weapons to Azerbaijan
U.S. Senator Bob Menendez (D-N.J.), Chairman of the Senate Foreign Relations Committee, on Wednesday sent a letter to Secretary of Commerce Gina...
17:00
Snow to persist across Armenia
Snow and fog will persist across Armenia throughout this week, the national weather service said. Strong winds of up to 20 m/s are predicted...
16:45
Will Smith and Martin Lawrence announce fourth 'Bad Boys' sequel
The “Bad Boys” are officially returning, with Will Smith and Martin Lawrence announcing that they’ll reunite for a fourth film...
16:30
Armenia’s ski resorts open up winter wonderland: TTN
The spa town of Tsaghkadzor in Armenia is becoming one of the top skiing destinations in the world with its majestic mountains and wide array of...
16:08
Armenian expert: Iran's efforts moving Turkey-Syria settlement to Astana format
Iran’s active diplomatic efforts are pushing the Turkey-Syria settlement to the Astana format, Armenian orientalist Armen Petrosyan said...
15:35
Iranian actions and statements helped to stop a further deterioration of that situation, deputy FM tells Al-Monitor
Armenia’s Deputy Foreign Minister Vahan Kostanyan has said that Iran’s actions and statements helped to stop larger Azerbaijani...
15:15
Ukrainian authorities search house of ex-interior minister Arsen Avakov
Former Ukrainian interior minister Arsen Avakov said his home was searched by security officials on Wednesday as part of an investigation into a...
15:01
Protesters in Yerevan urge EU action to end Azerbaijan's Artsakh blockade
A group of Armenian women on Wednesday staged a protest outside the EU Office in Yerevan, urging European Commission President Ursula von der...
14:35
Dangerous ice storm sweeps parts of US
Nearly 40 million people are under a winter weather alert in south-central parts of the US, spreading from Tennessee to Texas. A mix of...
14:15
Opposition MP dismisses authorities' 'dangerous' claims about Russia's responsibility for Lachin corridor
MP Gegham Manukyan of the opposition Hayastan bloc dismissed the Armenian authorities’ “dangerous” claims that Russia is...
13:33
Drivers warned over snow and ice in parts of Armenia
Some roads are closed or difficult to pass in Armenia as of Wednesday afternoon, the Rescue Service reports. In particular, the roads...
12:59
CoE resolution condemns Azerbaijan's destruction policy of Armenian cultural heritage in Artsakh
The European Parliament has adopted a resolution “On the implementation of the New European Agenda for Culture and the EU Strategy for...
12:43
Turin hands over keys of Eurovision to Liverpool
The official keys of the Eurovision Song Contest have been handed from the previous host city Turin to Liverpool in a grand ceremony, the...

Follow us and get updates!

Most popular articles

{"core.blocks.header.spell_message1":"Selected mistake: ","core.blocks.header.spell_message2":"Send a message about the mistake?"}