In 1998 Armenian-American billionaire Kirk Kerkorian granted a first $10 million then another $10 million credit to Armenia for small and medium business development. Consequently, Artashes Tumanyan, the president’s chief of staff, announced that Kerkorian had given this money to Armenia out of confidence in Robert Kocharyan. How has this money been managed? Hetq has received various calls of alarm and begun to investigate. We will provide our readers with periodic updates on Lincy Foundation projects.
When a project is doomed from the beginning
Certain banks were chosen to implement the Lincy loan program. According to an agreement by the Government of Armenia, represented by the Ministry of Economy and Finance and the Central Bank, and the Lincy Foundation, the selection was conducted by a commission created in 1998 by a decision of the prime minister on the following principle: “Armenian participating banks are to be selected from a list submitted by the Central Bank.” Logic would dictate that the Central Bank present a list of Armenia’s best banks, but it has become clear that the list was so logical. Otherwise, four of the thirteen banks involved in the small and medium business development project - Ardshinbank, Credit Yerevan, Credit Service, and Trust Bank -- would not be in the shape they are in today.
According to information that we have not yet been able to verify, in September 2000, before the first loan was advanced to Trust Bank, an employee of the Central Bank informed its chairman Tigran Sarkissyan in writing that the bank was facing serious problems which could lead to a credit crisis. This employee proposed that the Chairman of the Central Bank immediately launch an audit of Trust Bank. Two months after this letter, in November 2000, Trust Bank received $1 million from the Lincy Foundation and two in another two months, $1 million more.
Trust Bank did indeed go bankrupt, and somehow managed to return $1 million to the Lincy Foundation. The rest of the money, nearly $1 million more, remained a debt. It is impossible to understand why the Central Bank chairman put Trust Bank on the list after receiving such a dire warning. We haven’t been able to determine whether the Central Bank received similar calls of alarm about the other banks that went bust after they got Lincy Foundation loans.