Sunday, 23 September

Who’s Minding Armenia’s Natural Resources?

Ministry Has no Clue Regarding Chinese Mine Purchase

On January 12, the Chinese Fortune Oil Company based in Hong Kong purchased 35 % of Bounty Resources Armenia; owner and operator of three iron ore mines in Armenia.

According to the website of the London Stock Exchange (, the sale amounted to $24 million. The Armenian government has not commented about the sale. Given that the government usually is quite vocal regarding such transactions, it is more than a bit surprising that not only has the government remained mum, but that it even feigns ignorance that such a sale has taken place.

The likely explanation is that the purchase price has nothing to do with Armenia. The amount belongs to two Armenian MP’s – Vardan Ayvazyan and Tigran Arzakantsyan.

To get a hold of Arzakantsyan, to even find out where he is at the moment, is a job for an organization like the Interpol. This legislator rarely is seen in parliament and usually appears in press reports dealing with fisticuffs in this or that Armenian town.

MP Arzakantsyan’s assistant says the legislator has left for medical treatment. Where? No one rightly knows. Taking into account the intricacies of the Chinese sale, it’s safe to say that Arzakantsyan has been busy registering a number of companies and creating a labyrinth of a paper trail.

Let’s try to unravel the riddle and explain why the news reported by the London Stock Exchange, the Fortune Oil website and the statements of the RA Ministry of Energy and Natural Resources, are at odds with one another.

Bounty Resources Armenia Ltd. owns the iron mines in the Armenian towns of Abovyan, Hrazdan and Svarants. Fortune Oil’s website reports that the operating license for these mines was awarded to Nagin Ltd, which is 72% owned by Caspian Bounty Steel Ltd. The remaining 28% is owned by Souren Ayvazyan, son of MP Vardan Ayvazyan.

Caspian Bounty Steel is an offshore company registered in the British Virgin Islands. Nagin Ltd. is a subsidiary of Caspian Steel.

Bounty Resources Armenia holds 83.3% of the outstanding shares of Caspian Steel. The remaining 16.7% (estimated value $2 million) belongs to Fortune Oil.

In turn, Caspian Bounty Steel is a subsidiary of Bounty resources Armenia.

According to the contract, Fortune Oil has the option of boosting its share of Bounty Resources Armenia to 50%; by paying $16 million.

It’s a riddle wrapped inside an enigma… The goal is to hide who the real owners are and to circumvent government scrutiny.

The shareholders of the off-shore companies remain unknown. The only ones who do know are Vardan Ayvazyan, Tigran Arzakantsyan and some other officials who also remain unknown.

Given the silence of the government, you can bet your bottom dollar these aren’t just some casual state bureaucrats.

In response to our inquiries, the Ministry of Energy and Natural Resources stated that Bounty Resources Armenia hasn’t received an operating license for the iron mines in question.

The Ministry also stated that the Hrazdan mine belongs to Nagin Ltd. and the Abovyan and Svarants mines to Spice Steel Armenia, Ltd.

The Ministry went on to say that it had received no official information regarding any shareholder changes for the companies in question.

This is the extent of the information that the Ministry, the government body responsible for monitoring and supervising Armenia’s natural resources, has in its possession. Or so it says.

A large Chinese concern is about to operate on Armenian soil and the Ministry hasn’t a clue, or claims it hasn’t?

You can just imagine the state of Armenia’s natural resources.

Nagin Ltd. is owned by MP Vardan Ayvazayan’s son Souren and MP Tigran Arzakantsyan.

Both of them are also shareholders of Spice Steel Armenia.

Fortune Oil’s website notes that its investment in Caspian Bounty Steel and Bounty Resources Armenia comes from the company’s cash reserve fund.

This implies that our MP’s received $24 million in cash and paid no taxes from the sale of shares.

Our readers now get a picture of the money changing hands from the buying and selling of Armenia’s natural resources.

And nothing is going into the state coffers. Others are surely getting paid-off but not the state. This is how some people become MP’s and remain such.

No wonder the Chinese investments remained under the radar.

P.S. The information supplied to us by the Ministry of Justice’s State Registry Agency regarding the founders and owners of Nagin Ltd was clearly bogus. By the way, it cost us 4,000 AMD to get this information even though it should be freely available on the Agency’s website. The site hadn’t been functioning for some time. Was this done intentionally or was it just a case of negligence.

The information they supplied us and the information appearing on their now functioning site, differ. The Agency’s affidavit to us notes two founders of Nagin while the site notes seven names (see photos).

Perhaps we should demand the return of our 4,000 AMD in court?

Then too, shouldn’t we demand that that the Justice Ministry be penalized for supplying false information?

While this might seem rational on the surface, in reality, such a legal process through the courts might drag on for years before our demands are eventually thrown out anyway.

Let’s just hope the Ministry of Justice reads this and gets its act together.

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Comments (2)
1. hovik19:40 - 1 June, 2011
If the national competitive fund and Bekor Papazyan have to suffer because of these criminals, a revolution is not enough, public hangings are more appropriate. The hidden partners of "Bounty Resources Armenia" can be none other than Robert Kocharian or Serge Sarkissian, they're time has long been overdue.
2. Share Market13:18 - 4 October, 2011
It was a awe-inspiring post and it has a significant meaning and thanks for sharing the information. Would love to read your next post too... Thanks Regards: Share Market
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