Lawyer Nikolay Baghdasaryan and Artak Manukyan, Procurement Expert at Transparency International Anticorruption Center, shared insights into the legal and financial aspects of the recent deal of Demirchyan Complex.
Earlier on August 13 The Armenian Government approved the deal of selling Demirchyan Complex to NTAA Investment Group USD 30 million. The new owner, the deal fixes, will reconstruct the facility into a big entertainment center with concert halls, a new hotel, shops, restaurants and a casino. The company vows to invest at least USD 100 million over the next four years.
Nikolay Baghdasaryan believes the papers of the investment program lack accuracy and from a legal perspective it is rather unexpected.
“Yet, it is not clearly documented how the deal will be concluded and what those USD 100 million will be invested in. The takeover agreement will be signed within a month and the buyer must pay the Government USD 30 million. The buyer, though, may mortgage the facility and pay the Government with the loan it gets from a bank. As for the investments, it is not specified what type of assets – tangible or intangible - are involved,” Baghdasaryan said.
The proposal does not fix the type of the planned reconstruction, neither it documents what parts of the complex will be rebuilt into hotels, shops and other entertainment spots, Baghdasryan added.
“Thus, the decision as a legal document was drafted with an immense inaccuracy. If the deal were profitable, it would have been prepared in detail.”
Artak Manukyan does not speak against the complex’s privatization but the economist is concerned over the efficiency of the company as an owner.
“Any privatization first of all aims to develop the institute of an efficient owner and only then attract investments in the budget. Thus, the company must have experience and enjoy trust but when we study this company’s papers, we can obviously see that there is not one iota of trust. It is quite doubtful that this company has ventured into this industry without any experience record,” Manukyan said.
According to reports, NTAA Investment Group was registered in Armenia last month.
“Transparency is another major concern in this regard. Such projects require public discussions. The investment program does not contain a sentence which cannot be criticized. Let’s take the provision that job contracts at a monthly minimum of 55,000 drams must be signed with 99 employees within six months. There is the Law on Minimum Salary in Armenia which fixes 55 thousand drams as a minimum salary. It would make sense to write the amount of the salary if we talked about salaries exceeding the minimum limit,” Manukyan said.
The project, Manukyan believes, comes as a fusion of good intentions and copy-pasted phrases which lacks logic.
Lilit Arakelyan, Editor-Coordinator
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