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Tirayr Muradyan

Another Shady Deal: Armenian Businessman Buys Lake Sevan Hotel at Bargain Basement Price

Following the 2018 change of government in Armenia, Narek Nalbandian became a rising star in the country’s business sector, taking over property owned by Paylak Hayrapetyan at a price several times lower than the market price.

Nalbandian, who acquired properties through dubious transactions, has now become the owner of another large property now at the center of a criminal case. Hetq has revealed that Nalbandian has acquired the Hayrapet Hotel complex in the town of Sevan and two other adjacent properties.

Details of the 2021 transaction show that the businessman bought the hotel valued at US$6 million for $360,000.  

Nalbandian became known to the public when he acquired the Golden Palace Hotel in Tzaghkadzor, which was returned to the state by a former official, on preferential terms. The businessman's wife also bought the mansion of former Prime Minister Hovik Abrahamyan.  who is undergoing a criminal case, Monument.

As a result of transactions dating back ten years involving former Prime Minister Tigran Sargsyan, Archbishop Navasard Kjoyan and Ashot Sukiasyan, businessman Paylak Hayrapetyan’s property was seized years ago. Under the pretext of starting a diamond processing business in Armenia, Hayrapetyan's properties were used as collateral in Ameriabank. Loans were drawn up to invest in the mines located in Sierra Leone allegedly owned by Ashot Sukiasyan, to purchase diamonds and transport them to Armenia.

Hetq broke the story of this offshore scandal in a series of 2013 articles. 

Ashot Sukiasyan was the only defendant convicted. After spending nine years in prison, Sukiasyan left Armenia without serving the rest of his sentence.

Most of the real estate belonging to the businessman Paylak Hayrapetyan, who became a victim of the fraud, was sold, and used to repay the bank's debt. His unfinished hotel complex on the shore of Lake Sevan and two other adjacent properties were not sold.

The Hayrapet Hotel complex was built decades ago and never completed. It belonged to a company of the same name, whose shareholders are businessman Paylak Hayrapetyan and his sons. The company's property was also pledged for a loan for a diamond "business plan". When the offshore scandal was revealed and a criminal case initiated, it was proposed that Ameriabank refrain from expropriating the mortgaged properties until the preliminary investigation was completed.  

The criminal case of fraudulently dispossessing Paylak Hayrapetyan was investigated by the Investigative Committee until 2020. In 2020, the National Security Service (NSS) announced that Navasard Kjoyan was charged with being a part of offshore transactions as part of a new criminal case. Later, the criminal case studied by the Investigative Committee was joined to the criminal case initiated by the NSS and examined in one proceeding.

Archbishop Kjoyan was found innocent of all fraud charges.

At the same time, the bankruptcy case of the Dzoragyugh cooperative owned by   Ashot Sukiasyan, who had dispossessed Paylak Hayrapetyan, was being reviewed in the courts. Paylak Hayrapetyan's hotel was also pledged for a loan of that cooperative.

Despite the investigation of the criminal case regarding the fraud in the National Security Service and the legalization of the income obtained through criminal means, the bankruptcy court allowed the sale of the property of the Hayrapet Hotel. When we see who bought the hotel complex and for what price, doubts about the legitimacy of the transaction deepen.

With the permission of the bankruptcy court, the hotel complex was bought at auction for 191 million drams ($360K) by Project Inter-invest LLC in April 2021. The complex was valued at $6.640 million at the time of foreclosure (with a liquidation value of $4.3 million). Thus, the hotel was sold at a price eighteen times lower than the market value.

Narek Nalbandyan's company then leased a fifteen-hectare plot of land on the shore of Lake Sevan, which is considered state property. The specially protected nature area also includes a plot of land occupied by the Hayrapet H. According to the lease agreement signed between Sevan National Park and Project Inter-Invest LLC, the fifteen hectares were leased for a period of twenty-five years for an annual fee of 3 million drams.

Narek Nalbandyan's company also acquired two adjacent properties at prices way below their market value.

As we mentioned above, "Hayrapet" hotel complex of Tsovazard CJSC, in addition to the hotel complex, had 2 more properties. They are located in Tsovazard village of Gegharkunik marz. One is an area with more than 10 half-built houses on a 6 ha plot, where there are also other buildings. The other property occupies a smaller area: there are 5 half-built houses on 0.7 ha of land. Narek Nalbandian's "Project Inter-invest" LLC also acquired these properties at a much lower price than the market price. One for 13.7 million drams, the other for 4.7 million drams.

In 2020, Hetq wrote about how Narek Nalbandian became the owner of Golden Palace Hotel Resort & Spa in Tzaghkadzor that belonged to the family of Armen Avetisyan, the former head of Armenia’s State Customs Committee, and how Nalbandyan's wife became the owner of a private house in Yerevan that belonged to former Prime Minister Hovik Abrahamyan.

Responding to a Hetq written inquiry, Narek Nalbandyan claimed he learned about the sale of the acquired properties from public sources. 

"Our interest in the above-mentioned properties arose, and the transactions took place purely based on the logic of their benefit," Nalbandyan answered, noting that they did not encounter any obstacles when concluding the legal transactions.

The businessman brushed aside any idea that the properties, now subject to criminal cases, were obtained surreptitiously.

"We are governed by the principle of honest, fair and competitive business, and the suspicions you raise to the contrary might be considered reasonable if there were objective data that other persons also wanted to acquire these properties and obstacles were created for them,” Nalbanyan responded.

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