The conflict that began in 2005 between two of Armenia's wealthiest entrepreneurs, Gagik Tsarukyan, president of Multi Group and Valeri Mejlumyan, owner of Armenia Metal Program, continues to intensify.
In accordance with a contract signed last April 13 between Multi Group director Sedrak Arustamyan and Armenia Metal Program director Gagik Arzumanyan, Multi Group provided Armenia Metal Program with 1,000 tons of concentrate from its mine near the village of Mghart in the Lori marz. However, when the material was processed, experts discovered that the amount of gold did not conform to the accepted standards. Armenia Metal Program, a company that specializes in rare metals, made the discovery too late, due to inefficiencies in their methods of accepting material and ensuring production safety.
The low percentage of gold in the material was noticed in May 2005, the first month of processing, when the company recorded a loss of 20 kilos of gold in the black copper produced from the material. Similar losses occurred in November and December 2005 and January 2006. Overall, Armenia Metal Program lost 100 kilos from the black copper processed from 750 tons of the material. The market value for 100 kilos of gold equals 2 million US dollars.
Armenia Metal Program has kept the remaining 250 tons of unprocessed material. It hopes to receive a refund from Multi Group for at least for that part of the material.
An expert from the technical supervision department of Armenia Metal Program told us that the 25 bags of sample material sent by Multi Group before the deal was closed had contained a high gold percentage which conformed to the standards. The sample material was said to have been taken from the same mine as the 1,000 tons in question.
It is the technical supervision department at Armenia Metal Program that is responsible for ensuring the quality of incoming material. On February 22, head of the department Aram Mkrtumyan and four department employees were fired by director Gagik Arzumanyan.
When we spoke to Aram Mkrtumyan he insisted that he wasn't to blame and added that the management of Armenia Metal Program had threatened him because of the losses of gold. Mkrtumyan sent a letter of complaint to the Armenian president's supervision department. He received a reply stating that they were waiting for further action by owner Valeri Mejlumyan before proceeding with the issue. Mkrtumyan blames what happened on the senior management of the company, specifically Gagik Arzumanyan, who, according to Mkrtumyan knew about low quality of the material, yet didn't stop its delivery.
Arzumanyan refused to comment on the matter. Company production manager K. Feofanov explained that two samples of the material had been sent to Germany and Britain for laboratory analysis.
The results confirmed the low percentage of gold in the material.
Armenia Metal Program has not made public what steps, if any, it intends to take. In Alaverdi, we were given different explanations for what has been going on. Some think that Mejlumyan was conned by Gagik Tsarukyan and that his silence regarding the losses to the company can be explained by the fact that he probably realizes the dangers involved in dealing with Tsarukyan, the person closest to President Kocharyan.