Vahe Makunts, brother of Armenian Ambassador to the U.S. Lilit Makunts, is heavily involved in the extraction and sale of sand in Armenia’s Armavir Province.

It’s a lucrative business in Armenia that has attracted the attention of private investors and government officials.  

Vahe Makunts, who once served as an assistant to Armenian Defense Minister Suren Papikyan, started buying shares in four companies in the “sand business” in January 2023. 

X Mining LLC, one of the four companies he owns shares in, received a sand mining permit two months ago, but has illegally mined sand periodically since the start of this year.

The mayor of the town of Metzamor launched administrative proceedings against the company but then dropped them after Vahe Makunts invested in the company.

The companies in question were established in 2018. after the change of government in Armenia.

Vahe Makunts' business partners are not random individuals. One is the brother-in-law of Gagik Jhangiryan, a former Military Prosecutor and Deputy Prosecutor General of Armenia. Another is the former deputy minister of trade and economic development.

Vahe Makunts’ sister Lilit Makunts came to political prominence in Armenia after the 2018 “Velvet Revolution” led by current Prime Minister Nikol Pashinyan.  She served as Minister of Culture (2018-2019) and was elected to the parliament from Nikol Pashinyan’s My Step alliance in 2021. In August of that year, she was appointed Armenia’s Ambassador to the United States for a four-year term.

Vahe Makunts also held a variety of Armenian government positions following the 2018 “revolution”. He was appointed Assistant to Deputy Prime Minister Suren Papikyan in August 2021 and was dismissed four months later. When Papikyan was dismissed from the post, Makunts briefly served as Deputy PM. He then served as an assistant to Papikyan when the latter was appointed defense minister. Makunts left the ministry in December 2022. This is when he got interested in mining and selling sand.

Prior to his government posts, Vahe Makunts worked at VTB-Armenia Bank CJSC as a credit specialist (2011-2012), and at Yerevan’s Mkhitar Gosh University as a lecturer (2012-2015).     

Hetq asked Vahe Makunts about his activities in 2015-2021, which are not mentioned in his biography. In response, he stated in writing that in 2015 he moved abroad and got involved in the construction business – the extraction, transportation and sale of building materials. In 2020, he returned to Armenia and established a greenhouse farm in the Kotayk village of Mrgashen, Kotayk, and invested some 150 million drams.

Vahe Makunts submitted a property, income and expenditure disclosure to the Corruption Prevention Commission in 2021-2022. According to the 2022 declaration, he purchased the plot of land and the industrial building in Mrgashen   in 2020. He did not mention the price. In his written explanation to us, he only wrote, "I bought it from a private person with my own funds."

According to the declaration, Makunts sold several vehicles (2007 HOWO, 2008 Range Rover, 2011 Infiniti) for US$83,000 and purchased a Mercedes-Benz for $64,000. He sold the cars to Ararat Hovhannisyan from Ijevan. Makunts also gave Hovhannisyan a $50,000 loan.

Makunts said he bought the cars for business and Ararat Hovhannisyan was one of his colleagues to whom he provided the loan for his personal purposes.

According to the disclosure, Makunts received 38.464 million in income in 2022, of which 34.282 million was "other income", and the remaining 4.236 million 236 was salary from the Ministry of Defense.

Makunts reports that he received "other income" from the greenhouse farm he established in Mrgashen, where flowers are grown and sold.

When asked why he decided to engage in the sand business, Makunts replied he’d been doing similar work for years.

As to why he decided to acquire shares in established companies, instead of creating new ones, Makunts replied, "I thought it appropriate."

Given that his sister is a member of the political team of the current government, Hetq asked if these connections were used to carry out business activities on preferential terms, especially in the field of mining.

"No, I didn't use them. On the contrary, the circumstances you mentioned were a constraint for me, not a privilege," Makunts replied, adding that he acquired shares in four companies with borrowed and loaned funds, and with his own money.

According to his financial disclosure of December 31, 2022, the balance of these loans was 66.614 million drams.

Companies in which Vahe Makunts owns shares

X Mining LLC was founded by Harutyun Voskanyan on May 4, 2022. He the son of former Goris mayor Nelson Voskanyan.

The Voskanyans are not new to the business sector. Hetq wrote about road construction company Osmar LLC owned by Harutyun Voskanyan's parents and uncle. This company even participated in public procurements without a tender and did large amounts of work.

 Vahe Makunts now owns 56.6% of the company and Tigran Sedrakyan,.43.4%. 

Tigran Sedrakyan is the father of Karen Sedrakyan, a member of Armenia’s State Commission for the Protection of Economic Competition. Gagik Jhangiryan's daughter is Karen Sedrakyan's wife.

 

X Mining mines sand and gravel in the Armavir village of Argavand. (The village is part of the enlarged Metzamor community.)

Public hearings on the application for a preliminary environmental impact assessment of mineral extraction at the Argavand II site began when Harutyun Voskanyan owned the company. X Mining received a twenty-year mining permit    for sand mining on May 29, 2023. The company began mining sand before the permit was issued.

The company was then fined 380,000 drams by the Metzamor Municipality.

According to the information published on the website of the Ministry of Territorial Management and Infrastructure, the Argavand sand gravel deposit located in the administrative area of Tandzut and Argavand settlements occupies 91.4 hectares.

Criminal proceedings against the company for carrying out illegal construction were also launched by the Metzamor community, but later dropped. The municipality claimed the violations had been removed.

On July 3, Hetq visited the company’s sand mining site in Argavand. A man who introduced himself as the head of the workshop told us that employees of the Metzamor municipality visited them when they already had a permit for operation, that is, after May 29.

Hetq took a copy of the administrative protocol drawn up by the employees of the Metzamor municipality a few days after it was drawn up. At that time, we were not told about the violation.

It’s clear from the municipality’s termination decision that proceedings were initiated on May 23, six days after the protocol was drawn up. If the mayor of Metzamor had found out about the elimination of the violation during those six days, he would not have initiated proceedings, knowing it would be terminated. And if it was found out after initiating proceedings, then the question arises, on what basis was decided that the violations were eliminated on the same day. In the summary decision, it is not mentioned when the employees of the municipality paid a second visit to site.

The offense is clearly described in the record. “X Mining LLC is carrying out earthworks using Kamaz trucks and a crane, and cleaning sand from the lake shore using an excavator tractor," reads the protocol drawn up on May 17.

We can assume that the claim of the municipality to eliminate the offense on the same day and restore the sit to its former state is fictitious. Moreover, it is difficult to imagine how the company brought the land to its former state. Did it put the sand back into the lake? Who even witnessed this? Where was it recorded? Or did   municipality employees merely rely on the claims of company's employees, thus creating grounds for terminating the proceedings?

Perhaps, the Metzamor municipality learned who the new co-owner of the company was and decided to terminate the proceedings. We’re talking about Vahe Makunts.

It should be noted that Metzamor community head Vahram Khachatryan is also a member of the Civil Contract party, which implies a political connection.

We asked X Mining Director Ara Aramyan whether the termination of the proceedings was due to the connection with Vahe Makunts. Aramyan replied, "The relevant grounds are in the authorized body implementing the administrative procedure".

Hetq also asked the Environmental Protection and Subsoil Inspectorate whether it has investigated X Mining and whether cases of illegal subsoil use have been revealed.

According to the Inspectorate, no cases of illegal sand extraction were discovered. However, employees of the Inspectorate’s Armavir branch visited the site on March 28, 2023 and revealed the company had no permit for using its deep-water wells.  The Inspectorate decided to suspend the operation of the wells at the sand washing site.

Vahe Makunts and Tigran Sedrakyan are also the owners of Sanding Mining LLC with 56.6% and 43.4% shares, respectively.

This company was founded on May 5, 2022 by Gayaneh Dumanyan, the sister of former Minister of Health Derenik Dumanyan. She left the company on April 19, 2023, and Vahe Makunts and Tigran Sedrakyan bought the company. Ara Aramyan has served as company director since May 2023.  

It should be noted that Gayaneh Dumanyan is not new to the sand business. She and her husband's relatives own G.A.V. Sand LLC. She has owned 33% of the company's shares since 2015.

G.A.V. Sand has been in the process of forced bankruptcy since 2019. It has unpaid tax obligations of more than 36 million drams.

Hetq tried to get clarifications from Gayaneh Dumanyan and her son. They (who?) conveyed that Gayaneh Dumanyan is not in Armenia. Our emails to them on social media went unanswered. 

Wolf Mining LLC is another firm co-owned by Vahe Makunts. Founded in April 2022, the initial owners were Russian citizen Leonid Yeghiazaryan, former Deputy Minister of Trade and Economic Development Karen Sargsyan and Tigran Sedrakyan. On January 30, 2023, Vahe Makunts became the fourth shareholder.

35% of the company now belongs to Leonid Yeghiazaryan, 25% each to Vahe Makunts, and Tigran Sedrakyan, and 15% to Karen Sargsyan.

In Russsia, Yeghiazaryan produces baked goods and confectionary, transacts real estate and insurance deals, and operates hotels, restaurants and cafes. 

Wolf Mining owns one hectare of land in Armavir’s Araks village. In May 2023, the Araks community council decided to rezone the one hectare of land from agricultural to industrial and mining use.

The company doesn’t have a mining or exploration permit. However, considering the rezoning, the company may receive one soon.

According to Armenia’s tax agency, Wolf Mining is engaged in the wholesale trade of cement, sand, gypsum and gravel.

First Construction Company LLC is also in the business of sand mining. Founded in August 2019 by Lusineh Vardanyan, her husband Gurgen Hakobyan served as director from 2021-2022. was the director of the company. In 2019, Hakobyan founded the Protection of Subsoil Users' Rights NGO.

Hakobyan also owns XYZ Gold LLC, founded in 2018. According to Armenia’s tax agency, the company constructs of residential, public and industrial buildings.

Lusineh Vardanyan left First Construction in April 2022. Vahe Makunts and his partners then divided the company among themselves with equal shares.

 On April 13, 2022 Tigran Sedrakyan became a 25% owner, Leonid Yeghiazaryan (35%), Karen Sargsyan (15%), and on January 30, 2023 Vahe Makunts owned 25%.

Vahe Makunts says that he is no longer an owner of Wolf Mining and First Construction. However, according to information available in the State Register of Legal Entities, Makunts continues to have a stake in all four companies.

X Mining mining on Sanding Mining company land

During our visit on July 3, X Mining was extracting sand in waters belonging to the Argavand community, the sublease rights of which are registered under the name of Sanding Mining LLC. Ara Aramyan, director of the mentioned companies, says X Mining and Sanding Mining conduct joint activities according to an agreement they have.

Gor Tovmasyan initially leased the nineteen hectares of watery area. When he died in June 2022, the right to lease was registered in the name of his wife, Gayaneh Dumanyan, the founder and sole owner of Sanding Mining LLC. When she pulled out of the company on April 19, 2023, company shares were transferred to Vahe Makunts and Tigran Sedrakyan with corresponding percentages.

The right to sublease nineteen hectares of land in the name of Sanding Mining   was registered in the Cadastre Committee on March 6 of this year. According to the Metzamor Municipality, the company pays 2.354 million drams per year in rent.

Other plots of land in Metzamor are also registered under Sanding Mining LLC. It pays 67,500 drams annually for a separate 24.5 hectares.

In addition to sand mining, Vahe Makunts and his colleagues want to get involved in farming and raising livestock agriculture. Alfalfa is grown on land owned by Sanding Mining LLC.

Design by Tirayr Muradyan