Armenia’s Chief Compulsory Enforcement Officer’s Offshore Companies and Swiss Bank Accounts

Major General of Justice Mihran Poghosyan, Armenia’s Chief Compulsory Enforcement Officer, is one of the country’s officials who has sown deep roots in offshore economic zones.

While his companies registered in those zones operate, Poghosyan uses his position to advance his business interests, all the while concealing his income.

The data was obtained by the German newspaper SüddeutscheZeitung and shared by the International Consortium of Investigative Journalists (ICIJ) with the Organized Crime and Corruption Reporting Project (OCCRP) and more than 110 media partners from 82countries, including hetq.am.

Details about these transactions are buried in the Panama Papers, a trove of internal data of Mossack Fonseca, a Panamanian legal firm doing business in offshore tax havens for clients who want to hide their identities and/or holdings.There are Armenians included in these documents – CES chief Mihran Poghosyan and members of the families of his uncles Grigor and Mikhail Haroutyunyan.

40 year-old Poghosyan has headed the Compulsory Enforcement Service (CES) since 2008. His professional career began at the National Security Service (NSS) of Armenia. Poghosyan’s uncle Grigor (Grisha) Haroutyunyan was the deputy head of the NSS’s financial division at the time. 

Major General of Justice Poghosyan Lies

According to the decoded documents, Poghosyan has shares in three companies registered in Panama.

1. Sigtem Real Estates Incorporated
2. Hopkinten Trading Incorporated
3. Bangio Invest S.A.

Mihran Poghosyan on Linkurious.

Poghosyan, with a degree in economics, masters the complexities of the offshore world. Poghosyan is a stockholder through a clever device called ‘bearer shares’ where the holder of the share in the corporation is unknown but can nevertheless enforce his rights as a shareholder.  A bearer share is an equity security that is wholly owned by whoever holds the physical stock certificate. The issuing firm neither registers the owner of the stock, nor does it track transfers of ownership. 

Poghosyan obtained shares in the first two companies mentioned above in March of 2011, when he was already serving as Armenia’s Chief Compulsory Enforcement Officer. He’s owned shares in Bangio Invest since 2005.

Let’s now take a closer look at these companies.

Sigtem Real Estates Incorporated and Hopkinten Trading Incorporated are equal owners of Best Realty Ltd. registered in Armenia. Best Realty was the company that appraised the value of the Karen Demirchian Sports and Concert Complex in Yerevan. This was in 2015when the government decided to sell the complex to an outside investment group. Best Realty appraised the complex at about US$26 million and didn’t factor in that the complex is a state landmark. If complex management knew who Best Realty belonged to, they wouldn’t have been as surprised as they were on the day of the appraisal when the entire staff of the CES showed up as well.

In addition, Best Realty is linked to the CES in that the company carried out appraisals of fixed and moveable property in CES cases. For instance, Best Realty was given the job of appraising the fixed property at Building 9/1 at 11 Noragavit Street in Yerevan. Best Realty was also the company that appraised the land belonging to Hasmik Stambolyan in Yerevan’s Davtashen district. 

According to the leaked documents, Sigtem Real Estates Inc. and Hopkinten Trading Inc. have opened accounts in LGB Bank (Suise) SA. Mihran Poghosyan is the only person authorized to manage the account with individual signiture right. The director/president of Sigtem Real Estates Inc is Armenian MP Artur Stepanyan. Readers should be reminded that Armenian law prohibits MPs from engaging in or managing commercial enterprise while in office. 

Bangio Invest S.A. is the 100% shareholder of Fresh Ltd. in Armenia, a company which owned the Fresh supermarkets net, now only one perates on Yerevan’s Komitas Street. Flesh Ltd isn’t operating at the moment. Cethrine Group is exploiting Fresh supermarket on Komitas Street. BANGIO INVEST S.A. has opened an account Swiss bank – Dresdner Bank (Switzerland) Ltd. Mihran Poghosyan’s signature was needed to open the account and he was later authorized to manage it along with his uncle Mikhail Haroutyunyan. 

“I have frequently said that I’ve owned businesses before becoming a government official and that those businesses operated profitably. Now, there are some buildings and structures that have been leased to various commercial outfits. I, as a government official, do not have any business. As to my family members, my wife has no business, and my children are 14, 15 and 4 years old. I do not know why, but when a third or fourth relation has a business our society links it to the related government official,” Mihran Poghosyan is quoted as saying to the newspaper Haykakan Zhamanak. 

When Hetq asked about Mihran Poghosyan owning shares in offshore registered companies, the CES response was curt. 

“Armenia’s Chief Compulsory Office, Major General of Justice Mihran Poghosyan, has no affiliation with the companies cited in your inquiry.” 

This official, however, who claims not to own any business, in fact loans out large sums of money. Between 2013 and 2014, Mihran Poghosyan filed four court suits to get his loan monies paid back. On April 4, 2013, Poghosyan filed a suit at Yerevan’s Kentron and Nork-Marash Administrative Court against Star Divide CJSC, demanding that the latter pay him back 53 million drams. During the preliminary examination, Poghosyan withdrew the suit, arguing that “the defendant company had returned, in cash, the entire amount demanded in the suit.” On the same day, another suit was filed with Yerevan’s Shengavit Administrative Court, in which Poghosyan was demanding 4.7 million drams from Byourakn Ltd. This case was also dropped when Poghosyan withdrew the suit, claiming that the company had paid up. In November 2013, Poghosyan filed a suit against Armenian citizen Gevorg Afandyan, demanding US$ 5.147 million. During the trial, the two sides entered into an agreement by which Afandyan would have to pay Poghosyan 499 million drams within one month after the court decision took effect and daily interest on the amount starting on November 11, 2011. In August 2014, Poghosyan filed his last suit with Yerevan’s Arabkir, Kanaker-Zeytoun Administrative Court. The defendant was Business Leader Holding Ltd. owned by Armen Nazaryan, the son of former Yerevan Police Chief  Nerses Nazaryan. Poghosyan was demanding that the court seize 11 million drams from the company.

Meanwhile, Poghosyan’s 2015 declared revenues and cash holdings were quite modest – 22.359 million drams in revenues ($46,300), of which 12.5 million was wages, and the rest in the form of loan repayments received. His foreign cash holdings were $200 000 and 12,000 Euros.

Poghosyan’s wife declared no revenue for 2014 and 2015. Nevertheless, this didn’t prevent Mrs. Mkhitaryan from purchasing a $70,000 Range Rover Sport-HSE.

Why the name Catherine Mihran?

When talking about Poghosyan, the name ‘Catherine Mihran’ is frequently mentioned. Catherine (Ketrin) Group Ltd., an importer of bananas, citrus and tropical fruits that enjoys a monopoly in the sector, is directly tied to Mihran Poghosyan. First, in his CV, Poghosyan notes that he founded the company in 1997 and, according to Armenia’s State Registry, held shares in the company until 2008. In addition to Poghosyan, his wife Karineh Mkhitaryan also owned shares in the company until 2015. In 2012, company shares were gradually moved offshore, to Panama. The sole owner of Catherine Group today is Cendoline Corp., a company registered in Panama. There is no data regarding this company in the leaked documents. However, taking into account Poghosyan’s vast experience in Panamanian affairs, one can assume that Cendoline Corp. also belongs to him.

Poghosyan’s involvement in Armenia’s banana scandal first came to light in 2008. Between 2005 and 2007 Ketrin Ltd (Ketrin Group in past). avoided having to pay various customs taxes and levies and VAT tax when it introduced some 6,500 tons of bananas “to enter free circulation” according to customs regulations.Similarly, Ketrin was obligated to export the reprocessed product from Armenia. And since no such reprocessing took place the company forged its documents to show that it indeed had exported banana oil to the Bahamas. In the end, the Ketrin Company got away with not paying the government taxes amounting to some 443.7 million drams ($1.479 million). Law enforcement deemed that smuggling wasn’t at issue, rather tax avoidance.

During the past few years, Ketrin Group has been listed as one of Armenia’s large taxpayers. In 2015, the company ranked 100^th, paying 1.2 billion drams in tax. In 2014, the company came in 81^st, paying 1.6 billion drams in tax.

Besides importing bananas, citrus and other tropical fruits to Armenia, Ketrin Group is engaged in other business sectors. As of 2009, it has expanded its agro-business position by importing fertilizer and pesticides. It’s also involved in animal husbandry by raising pigs, cows, sheep and turkeys. It also has a hand in the automobile business, and has won related government supply contracts without any tender bids. In 2015 Poghosyan signed a 3 million-dram repair contract for CES cars with none other than his own company, Ketrin Group.

In point of fact, Poghosyan is lying when he says he owns no businesses. He hasn’t lied about owning real estate. Hetq has received a list of owners of property at 4/6 Amiryan Street in downtown Yerevan.  

According to Armenia’s State Cadastre Registry 32 individuals and companies own office space at Building 4/6 on Amiryan Street. Mihran Poghosyan owns one of them – the 143^rd space. And 19 spaces at the same address are registered in the name of Poghosyan’s uncle, Grigor Haroutyunyan and his daughters. The Kavkaskaya Plennitsa restaurant is located at the same address, along with Griar CJSC, the Paris Hotel and other establishments.

Mihran Poghosyan is also linked to the Kecharis hotel-complex in Armenia’s resort town of Tzaghkadzor. Naturally, the hotel isn’t registered under his name. It’s under the care of someone representing the interests of the Haroutyunyan clan. According to Armenia’s Corporate Registry, Edward Haroutyunyan is the official shareholder of Kecharis (Edward Haroutyunyan is the director of Best Realty ltd). 

On March 3, 2015, Ketrin Group presented a plan to the ministry of nature protection to build and operate cabins, baths, a swimming pool and a café on a 5,060 square meter plot of land adjacent to the Kecharis hotel-complex. In the project it is noted that lands adjacent to the Kecharis Complex will be used. This means that the owner of Kecharis and the new project is the same person.   

Mihran Poghosyan’s distant relations and their businesses 

Minhran Poghosyan’s uncles also have businesses registered offshore. In September 2015, Mikhail Haroutyunyan became a shareholder in Gaitskell Holdings Corp. registered in the British Virgin Islands. Kopa Tagoushi, a Georgian, is listed as director. The company does business in Georgia. 

Mikhail Haroutyunyan’s son Vahan also owns shares in a company registered in Panama – Farlen Real Estates Corp. Vahan Haroutyunyan also manages an account at LGB Bank (Suise) SA. 

Mihran Poghosyan and family members are involved in many of the important business ventures in Armenia. They are nourished with state budget funds, implement government programs, and are embroiled in controversial projects. 

Drivers in Yerevan started to have to pay for many parking spots in the city on September 1, 2013. Parking City Service CJSC is the company that won the municipality’s tender to manage the paid parking system. Tigran Haroutyunyan, a son of Poghosyan’s uncle Mikhail, owns shares in the company that the public regards as just another means for the government to milk them. 

Tigran Haroutyunyan is the sole shareholder of Mikshin Ltd., a company that won an 800-million-dram government contract to build apartments for civil servants. 

Metexim Ltd., with collection centers and smelters throughout Armenia, is in the business of exporting metal scrap. It also has its own customs warehouse, supplies large construction equipment, and also organizes railway transport and carries out cargo transportation. 

MikMetalCJSC is also linked to Mihran Poghosyan. His uncle Mikhail owns 25% of the company and the rest is buried offshore. In reality, 75 % of shares in MikMetal is owned by Morako Holdings Ltd. According to documents culled from the Cyprus Corporate Registry, Morako Holdings has been owned by Cypronavus Limited, Cypropublico Limited and Cyproservus Co. Limited, all registered in Cyprus. Generally, they are the representatives of a legal company that register such companies. As with ‘bearer shares’, they too are presented as shareholders since they have an agreement with the actual shareholder about share ownership. Given Mihran Poghosyan’s Panama experience, it cannot be ruled out that he in fact is the owner of MikMetal’s remaining 75%. Otherwise, there would be no need to conceal the fact in the offshore web. These shares as well could have been registered in the name of someone else like Mikhail Haroutyunyan. 

Mikhail Haroutyunyan’s wife Narineh Aghasaryan manages the Yerkir Nairi tourist agency. She owns 100% of the shares.

Vahan Haroutyunyan owns the shares of Kaga Kreto Ltd. Karineh Mkhitaryan, the wife of Mihran Poghosyan, served as company director until 2011. The company had once been called Lika-Mihran Ltd. 

Mihran Poghosyan personally struck a 11.5-million-dram deal with Griar Telecom Ltd. to provide public telephone and inter-city telephone services for 2012-2016. 

Griar Telecom is affiliated with construction giant Griar CJSC. In 2004, Griar CJSC won the lion’s share of a job to build six 14-story buildings along Yerevan’s Main Avenue. 

Grisha Haroutyunyan is the president of the board at Griar CJSC. His son-in-law Artur Hordanyan is company director. Ara Dolounts, a former deputy regional governor of Syunik, Artur Hordanyan, and Russian registered Ches Tor CJSC had shares in Griar CJSC. Griar Shinarar, Griar Nakhagitz, Griar Hanks and Griar Service are subsidiaries of Griar Group. 

The business interests of the Haroutyunyans don’t end here. Mihran Poghosyan is well entrenched in the businesses of his relatives and skillfully attempts to conceal them and the revenue they provide. 

Will Mihran Poghosyan continue to deny that he currently doesn’t own any businesses even after these documents have been published? Most likely, yes. 

No government agency will ever look into the matter since Poghosyan is considered under the ‘protection’ of President Serzh Sargsyan.