The Cyprus registered company Four Assist Development Consulting Ltd (4Assist) has taken the Control Chamber of Armenia to task for publishing a number of inaccuracies regarding 4Assist that appeared in its “2013 Annual Report”, demanding that corrections be made.

In a May 21, 2014 letter penned by 4Assist Authorised Representative Maria Tasioula to Control Chamber Chairman Ishkhan Zakaryan, she writes that the report contained “certain inaccuracies regarding the project “Implementation of International Public Sector Accounting Standards Strategy 2” that we [4Assist] implemented from June 2012 to June 2013 on behalf of the Ministry of Finance of the Republic of Armenia.”

In her letter, a copy of which 4Assist made available to Hetq, Tasioula lists these inaccuracies, and describes them as “violating the rights of 4Assist and harming our international business reputation.”

Maria Tasioula has also responded to a number of questions Hetq sent to 4Assist shareholder Irina Grigoryan.

Readers should note that in 2012-2013 4Assist received US$ 704,000 (including taxes) to draft a set of programs designed for government decrees regarding accounting calculations and to conduct a trial run of an automated accounting calculation system in Armenia.

Of particular concern to 4Assist is that the Control Chamber, in its report, wrote that an Armenian company called PHP Partners actually did all the work through a sub-contacting agreement.

Another inaccuracy cited by 4Assist is the following passage taken from the Control Chamber’s report where the Cypriot company is referred to as “artificially created”.

“Cases of “artificially created” non-resident companies and their use were observed. In particular, a local company interested in a tender purposely creates a non-resident company or reaches an agreement with an existing one in order to win the tender and sign the contract having an advantageous position in the tender... As a result the participation of non-residents in public procurement becomes merely formal, the funds are transferred out of the Republic” (Section 2.1 of the Control Chamber 2013 Report).

In response, Maria Tasioula writes: “Four Assist Development Consulting Limited has been in existence long before the project in question was even conceptualised, i.e. since 2007, and has an international presence in many more countries than Armenia, as stated above.” 

In her letter to the Control Chamber Tasioula notes that: “The contract notice of the Ministry of Finance required a leader company with international experience in public sector accounting. Four Assist Development Consulting Limited possesses this experience, unlike PHP Partners CJSC whose experience is limited to Armenia. Therefore, the division of works was provided by Four Assist Development Consulting Limited as leader-company with PHP Partners CJSC being given their part of the work on the basis of their knowledge of the Armenian context.”

To bolster her argument that 4Assist took the lead role in the project and did all the work, Tasioula writes: “It must be noted that Four Assist Development Consulting Limited provided, among other things, two internationally qualified accountants (including the team leader of the project) for the implementation of the project and a range of quality control and backstopping services.”

The 4Assist representative concludes her letter by stating that: “PHP Partners CJSC would not have the technical capacity and international exposure to provide these services. Thus, the presence of Four Assist Development Consulting limited was a necessary condition for the execution of the contract.”

In her response to Hetq, Tasioula notes that: “We would like to clarify that according to the minutes of opening of financial offers published by the MoF [Ministry of Finance] on 30 March 2012, our financial offer for this project was almost half the price of the second best offer (925,000 USD).

Responding to the Hetq question as to why the programs were drafted in Cyprus and not Armenia, Tasioula wrote:

“4Assist is an international consulting firm operating worldwide since early 2007, which is 5 years before the concerned project in Armenia started. Our business interests go well beyond Armenia, as we have explained above and in our Note to the Chamber of Control. Our current focus is to work in Africa, Asia and Eastern Europe where we consider that there is prospect. Our company is based in Cyprus, which is an EU Member State. We have never considered opening a branch in Armenia because the scope of business there is limited.”

In response to our question as to what links exist between Armenian shareholders of the Cypriot registered 4Assist and government officials in Armenia, Tasioula writes:

“In the course of their international professional career our partners have worked also in Armenia through a number of successful international projects. None of our partners have had any relations with Armenian public officials other than professional. It is important to clarify that none of our partners has ever worked in any ministry as a public servant; instead, as stated above, they have been advisers to the Government of Armenia through international projects.”

These ‘revelations’ by Armenia’s Control Chamber appear to have shocked the directors of 4Assist. In addition, they were annoyed by a passage in an earlier Hetq piece where we noted that 4Assist never clarified the revelations made by Control Chamber Chairman Ishkhan Zakaryan.

In this regard Tasioula wrote Hetq that: “…provided no clarification”, which is a false statement. We were never asked to provide clarifications neither during the audit nor after the publication of the Control Chamber report. We only found out ourselves about this from the Armenian press. Nevertheless, on May 21 we submitted to the Control Chamber a letter addressing the report’s incorrect statements and inaccuracies and asked them to revise the relevant sections. We haven’t received a response to date.”

4Assist never responded to Hetq’s inquiry as to how much payment the company received for each program implemented in Armenia. Its guarded response was that: 

“4Assist has very limited business activity in Armenia compared to its worldwide presence. Our very few projects in Armenia were awarded to us on a competitive basis including a set of technical and financial criteria in line with the international donor rules and procedures for competitive tenders. You may find the projects we have implemented in Armenia on our website.”