Friday, 21 September

Where is Ardshinbank's money?

On February 28, 2002 an announcement was made in the press that the Central Bank had appointed temporary administrations at Ardshinbank and Adana Bank, and decided to merge the two banks.

Approving the merger, the Central Bank allocated a $ 5.5 million loan to the unified bank. The head of the banking supervision department of the Central Bank, Artashes Davtyan (currently in prison) was appointed head of the Ardshinbank administration and his deputy, Karen Hambardzumyan, head of the Adana Bank administration. It also became known on February 28, 2002 that several employees of Ardshinbank and the executive director of Adana Bank had been arrested. And a few days before that, the prosecutor’s office had released the information that the director of the Kentron branch of Ardshinbank, Gagik Stepanyan, had disappeared after appropriating a large sum of money (about $3 million). A search for him was begun.

Ardshinbank was one of the biggest and most important banks in Armenia. Adana was a small presence in the banking system. Then in February, the deputy head of the banking supervision department of the Central Bank informed the press that Adana Bank was insolvent. In that situation, the merger of Adana Bank with Ardshinbank was hard to understand. About 80% of the founding capital of Adana Bank belonged to the family of Alexander Vardanov, a resident of Saint Petersburg. Among the big shareholders of Ardshinbank were the executive director of the bank, Levon Farmanyan, and the director of the Kentron branch, Gagik Stepanyan, (with a combined total of about 30% of the shares).

Alexander Vardanov was born in Saint Petersburg. He has a PhD in economics and was a lecturer at the Institute of Finance and Economy of Petersburg. In 1988 he moved to Armenia with his family. From 1991 to November 5, 1993, he was the executive director of Ardshinbank. During his tenure as director, Vardanov’s first deputy was Gagik Stepanyan. At that time the USSR ruble was recalled from circulation. A commission (known as the revolutionary “troika”) was created to put the national currency into circulation. The chairman of the commission was Tigran Sarkisyan, then chairman of the Parliamentary Commission on Financial Issues. Isahak Isahakyan, the chairman of the Central Bank at the time, and then-Finance Minister Levon Barkhudaryan were members of the commission. Significantly, Vardanov had fundamental differences with the government over privatization and a number of other matters. He gave an interview to the press about theses differences, arousing the resentment of the government, which then made a political decision to dismiss him.

He was also perceived as Vazgen Manukyan’s man. And it was none other than Tigran Sarkisyan who proposed that Vardanov resign. In May 1994 Vardanov and his family returned to Saint Petersburg where he worked as the deputy chairman of the board of the Saint Petersburg branch of Credo Bank, and at Credit-Moscow Bank. From 1997 to the present, he has been the chairman of the board of the Saint Petersburg branch of Vneshtorgbank. In December 1994 he bought a small amount of stock in Adana Bank. In 1998 he invested more money, and his family became the biggest shareholders in Adana. At the end of 2001, incidentally, the profits Adana Bank were AMD 20 million (about $36,000).

On February 27, 2002 the Central Bank decided that in order to “reorganize” Ardshinbank, a prompt investment of $ 5.5 million was needed, which the Central Bank then made. Naturally, in nine months, another $ 5.5 million was needed, as the time to repay the Central Bank loan was approaching. Despite Central Bank Chairman Sarkisyan’s assurances to the contrary, Ardshinbank did not recover. It ultimately collapsed, and was replaced by Ardshininvest Bank.

But the main questions remained unanswered:

1. Where is the nearly $3 million that Gagik. Stepanyan made off with?
2. What happened to the $ 5.5 million allocated for the reorganization?
3. What happened to the depositors’ money? What portion of that 5.5 million was distributed among the depositors? 
4. Ardshinbank granted loans to various organizations and individuals. How will these loans be repaid, for example the $2.5 million (out of the $5 million Greek credit) lent to the Interkimreaktive plant?

Although the court has made a decision on Ardshinbank, some details remain unclear. In particular, Aram Gasparyan, the executive director of Adana Bank, was involved in the Ardshinbank case, first as a witness and then as a defendant, and was sentenced to 1.5 years in prison. Many people don’t understand what he had to do with Ardshinbank. On February 26, 2002 (when Gagik Stepanyan had already been out of Armenia for three days) when a representative of Adana Bank tried for some reason to transfer money from its account with Ardshinbank, he was told by Ardshinbank that there was not enough money in the account. This surprised theAdanarepresentative. That same day the Chairman of the Board of Ardshinbank, Levon Farmanyan, said in a phone conversation with the Chairman of the Board of Adana Bank, Alexander Vardanov, who was inYerevanat the time, that on February 5, 2002, at the request of Adana Bank, a sum of $270,000 had been transferred out of the account.

Vardanov and his wife, Nune Mkrtumyan, (Adana Bank executive director Aram Gasparyan’s deputy) were startled by the news. They immediately went to Ardshinbank and demanded the transfer papers from Farmanyan. It was discovered that the transfer order had been filled out by Executive Director Aram Gasparyan (an investigation subsequently revealed that the handwriting was authentic), and that Gasparyan had also forged the signature of the bank’s chief accountant.

The $270,000 had been transferred into the account of the Astghatsolk organization. This organization is owned by Samvel Alexanyan, now a member of parliament. In court on April 11, 2003, the accused, Aram Gasparyan, the former executive director of Adana Bank, addressed the court: “It never occurred to me that I, as the bank’s executive director, would end up here. The transaction was made as a gesture of friendly assistance.” His friend is Gagik Stepanyan, and the money was transferred to pay off Stepanyan’s debt to Samvel Alexanyan.

Before that, Vardanov had called Gasparyan from Levon Farmanyan’s office. Gasparyan admitted that he was behind everything and had forged the accountant’s signature. Vardanov asked Gasparyan to meet him inSakharov Square. Farmanyan informed Ardshinbank security. When they met in the square, Vardanov invited Gasparyan to his home (he lived nearby). The security officers followed them and called the Kentron district police, who arrested Gasparyan. The same day Vardanov’s wife, Nune Mkrtumyan, made a statement about Gasparyan at the police station, and later in the evening she and the chief accountant were invited to the Kentron district prosecutor’s office to gave detailed evidence about what had happened.

There is another fact which may prove important. Nune Mkrtumyan recalled that on February 12, 2002 (ten days before it became known that Gagik Stepanyan was on the run) Stepanyan called their home inSaint Petersburg: “Gagik talked to my husband and then he passed the receiver to Tigran Sarkisyan. Gagik said that Levon Farmanyan was no longer going to be the director of Ardshinbank, that Tigran was very angry with him, that he would no longer be working, and that the question of replacing Farmanyan had gone through all official channels. Then Tigran took the phone. He spoke very cautiously. He said that Gagik had told him that we were going to make an investment, and he wanted to know what my husband’s plans were. My husband said that there was no such thing, that he wasn’t going to make any investment and that he hadn’t been thinking in that direction.” In fact, in this telephone conversation Stepanyan informed Vardanov that he would soon become the director of Ardshinbank. And an assurance like that could only have been given to Stepanyan only by the chairman of the Central Bank, Tigran Sarkisyan. Remember that ten days after this call, Stepanyan leftArmeniawith the bank’s $3 million. And a few months later, was dead.

To be continued...

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