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Seda Hergnyan

Armenian IT Company Gets $210K in State Aid; Goes "Belly Up"

On December 1, 2022, the Armenian government adopted a decision to provide 10 billion drams of state support to organizations operating in the IT sector.

The government justified the assistance by pointing to losses suffered by the companies primarily because of the devaluation of the Armenian dram against the dollar.

Eftek Lab LLC, a company founded in 2022 that received 91.5 million AMD (US$210K) in taxpayer money, went belly-up in January after several months of non-operation.

Former company director Ani Tumanyan told Hetq that the Ministry of High-Tech Industry never followed up to see if the money was being spent and for what purpose.

Equally disturbing is that thirty-three of the forty-seven companies that received state support were founded in 2022, just like Eftek Lab.

Hetq had to file a lawsuit when the ministry initially refused to provide the names of the companies receiving assistance and in what amounts.

See: Armenia Allocates Millions to IT Companies; Data the IT Ministry Wanted to Keep Secret

Fourteen of the forty-seven companies were either founded or managed by Russian citizens. Some were Armenian subsidiaries of global companies.

The government claims that the 7.9 billion AMD of the ten billion disbursed created 5,854 jobs in the IT sector.

Encouraged by its own publicity, the government now plans to allocate an additional 7 billion AMD (US$17.3M) to the IT sector.

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