Edik Baghdasaryan

Media Moguls: On the Trail of Armenian TV Owners; Foreign and Domestic

Owing to its large audience and influence on the viewer,TV has become an important weapon in the strugle being waged foreconomic and politcal power. The ruling elites have realized that the impact of the print media in the country has waned and that it is TV broadcatsers who actually help shape public opinion.

After the 1998 elections, the regime started to take the broadcast media "under its wing". During the ensuing years the regime has succeeded, by using all the leverage at its disposal, to establish widespread supervision of TV broadcasters, by prior "selection" of station owners. To speak about the independence of TV broadcasting in Armenia today would be fallacious. Practically all TV stations are subject to state monitoring. This issue has been raised for many years now, and not just in Armenia. Various international organizations have also reached the same conclusion. I say "practically" all since there are at least two TV stations that do not submit to the "Center". I will come to them later.

The news and political programming of TV stations is monitored and supervise from the one center; the presidential office. This dependency on the center becomes especially evident during election campaigns as well as during times of political tensions. What would happen if these stations did not submit or follow the dictates from the center. To give a specific answer we must clarify how the TV stations operating today came to be and how they received public broadcasting rights. Just as important, we must understand who the real owners of these stations are. According to information from the Ministry of Justice, some of Armenia's TV stations are financed by foreign capital sources.

Some of the information regarding these companies is not available publicly since they are closed joint corporations. We sent a letter of inquiry to Grigor Amalyan, President of the National Commission on Television and Radio (NCTR) for some information on these companies. We wanted to know, in particular, if the NCTR knew anything about the foreign capital connection. We pointed out the fact that one of the founders of one of the TV stations was a company registered in the British Virgin Islands, considered an off-shore zone. Has the NCTR ever taken the time to find out just who is behind this off-shore corporation? We received a reply from Jirayr Dadasyan, NCTR Deputy Chairman. "In answer to your letter, let me state that the NCTR, within the limits of its jurisdiction, checks the existence of prohibitions regarding the founders of TV stations as envisaged by the RA Law on TV and Radio, Article 17.

The Committee inspects the personal operations of the TV stations, in which are included the charter documents of the stations." These charter documents include information on the individual founders and who owes what percentage of shares. Given this information, the NCTR can easily determine the percentage of foreign capital involved . As to the question of the shareholders of the foreign corporation, "Article 17 of the above-mentioned law sets no restriction regarding foreign holdings or the country of registration. Thus, the NCTR has no jurisdiction to clarify such issues." Our research has shown that the NCTR has not clarified the share of foreign capital participation and the identity of the founders when it comes to certain TV stations.

“Armenia TV”

The owner of this TV station is "Armenia TV", a closed stock company. By law, the shareholders of closed stock companies remain undisclosed if that is the wish of the shareholders. Bu Article 17 of the RA Law on TV and Radio contains a point about founders, saying that at te time of the founding of TV station, or afterwards, the extent of foreign capital participation must not be equal to or exceed the operating capital employed by the broadcasting company This means that the NCTR is obliges to know who the shareholder are. It is the NCTR that must first get to the bottom of who the shareholders are and the foreign capital involved. It is hard to say if this point of the law has been violated or not, since such information has not yet been made public. Then again, there are many instances of which we know of when organizations hide such information from the public.

There is foreign capital involved in the TV stations owned by Armenia Media Holding and there are suspicions that in all three companies the percentage of foreign capital exceeds half. Armenia TV was founded in 1999 by the Sargsyan family. The well known American benefactor Gerald Cafesjian also became a shareholder in 2001. Today the two shareholders are the Cafesjian Family" foundation and the Sargsyan family.

On September 4, 2004, ceremonies marking the launch of CS Media, or otherwise known as Armenia Media Holding were held. This is a giant holding company which owns "Armenia", ArmNews" and television stations, "FM 10" radio and a number of other companies. Cafesjian got a hold of the Cascade property in Yerevan at a pretty good price with some backing by former RA President Robert Kocharyan. Later on, he also picked up "HayFilm" cinemas studio, also at a good price. After Kocharyan left office, the position of Bagrat Sargsyan started to weakened, even though he really had no long-term plans of staying in the TV business. Sargsayn was actually thinking of moving to the United States, the country of his patron, Cafesjian. Information as to the share percentages held by Cafesjian and Sargsyan isn't public.

Rumor have been recently circulating that the shares of Armenia TV have been sold off. We haven't been able to verify this. According to the law, information as to shareholder changes is maintained and controlled by Armenia's Central Depository and one can only be granted information from that body if the shareholders themselves agree. By law, it is the NCTR that should obtain such information, especially since there is foreign capital involved.

"ArmNews" TV Editorial Board

The company's founder is "Cinemax" Ltd. "Cinemax", in turn, was founded by "Hermes" CJSC and "ArmNews" CJSC. The owners and cofounders of "Hermes" are MP Harutyun Pambukyan (52.5%) and | "Investment Worldwide Grew Route Town (47.5%), registered in the British Virgin Islands. Companies register off-shore in an attempt to evade taxes and the identity of shareholders. Yeras ago, Pambukyan's "Midland Resources Holding" registerd in the British island of Guernsey, transacted one of the largest energy deals ever in Armenia. The stock owners of Arm News aren't known. The founding capital of ArmNews is 140,100,000 AMD and there are 14,100 stock issues. In other words each share is worth 10,000 AMD. According to our information, tere is foreign capital involved here as well, and it is most likely that one of the shareholders is Gerard Cafesjian. It is not known the extent to which Hermes and Cinemax have a stake in ArmNews. This is the third of the above-mentioned companies having foreign capital. Moreover, one of the shareholder companies is registered off-shore. And since there are certain prohibitions when it comes to the founders, then the NCTR is required by law to know who these off-shore foreign shareholders are. Another interesting side bar to this story is that ArmNews was granted a broadcast frequency illegally, since at the time of the tender there was no such mass media outlet registered. The bid was placed by 'Cinemax", using the technical and photo resources of "ArmNews"

"TV 5"

TV 5 is a station that is owned by "TV 5" CJSC. It remains the property of Cafesjian and the Sargsyan family. There is foreign capital here as well but the amount ids unknown

"E.V." TV or the illegal broadcast

The founder id "E.V.". The station rebroadcasts CNN programming. The founding capita is 42 million AMD. Registered in 1992.e were two original owners: 1) Luisa Khachatryan (50% - 21 million AMD) 2) Vanderblit Prop. Inc, USA, East Wisconsin 22550 (50% - 21 million AMD) It turns out that half of this corporation is foreign owned. In 2007, Artyom Sargsyan, Bagrat Sargsyan's father, obtained the shares of Luisa Khachatryan. Let us again cite that point of the RA Law on TV and Radio which says that at te time of the founding of TV station, or afterwards, the extent of foreign capital participation must not be equal to or exceed the operating capital employed by the broadcasting company. In the case of EV TV this point has been violated from the start and the NCTR has apparently nor noticed this infraction of the law. Otherwise, it should have never allowed the company to participate in the tender.

To be continued