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“All corrupt local shareowners who used to be public officials and have used their position to acquire shares in Zangezur Copper Molybdenum Combine, their shares will be confiscated and given back to the people. Your fate is sealed!”, Armenia’s PM Nikol Pashinyan announced on June 16 as he was speaking about the Combine’s operations during his electoral campaign in Syunik. “Those felons have owned the Combine long enough!” he said afterwards and then promised that the people and the government would soon have their own shares of the company’s stocks.

Following the formation of the new government, the executive announced on September 30, 2021, that “Industrial Company”, a Moscow-based joint-stock company, owns a good 60% share of the stocks of Zangezur Copper Molybdenum Combine, 25% of which the company wishes to donate to the Prime Minister’s Office. The government gladly accepted the present. It seems at first that Pashinyan has fulfilled his promise, but not in its entirety. CivilNet will show how certain former and present officials got hold of shares in the Combine.

About Zangezur Copper Molybdenum Combine

Zangezur Copper and Molybdenum Combine is Armenia’s largest mine where copper and molybdenum ore are extracted, smelted, milled into concentrates, and then exported. Exploration in the area began in 1935, and by the end of 1951, the mine was already being exploited. The confirmed volume of mineral ore in the area is 2 billion and 210 million tons. The Combine has always topped the chart of Armenia’s biggest taxpayers. It has at least never left the list of the top 5. Last year, for instance, the company was Armenia’s third biggest taxpayer with 41.6 billion drams. It now has 4000-4500 employees. Up until 2004, the mine was owned by the Government of Armenia, which soon began to privatize the company by separate decrees, eventually alienating 60% of its shares to a German corporate group called Cronimet for 132 million dollars. The group was founded in 1980 in Karlsruhe and is engaged in mining in several dozen countries around the world. It is owned by the Pilarsky family led by Günter Pilarsky who is the honorary consul of Armenia to the German federal state of Baden-Württemberg.

15% of the Combine’s shares belonged to “Plant of Pure Iron” OJSC and were held by Genik Karapetyan, an entrepreneur specializing in metallurgy. In 2014, these shares were bought by Cronimet, making it the owner of 75% of the plant’s share capital.

One of the owners of 12.5% of the enterprise’s stocks was “Zangezur Mining” whose main shareholder was the plant’s former executive Maxim Hakobyan along with several members of his family. Maxim Hakobyan became manager of the plant in 2003 and quit the position in 2017. The remaining 12.5% of the stock was owned by the company “Armenian Molybdenum Production”. The shares were equally split between Maxim Hakobyan’s former parliament member son Vahe Hakobyan and businessman Karen Karapetyan.

Maxim Hakobyan quits the Combine

Major changes occurred in the plant in 2017, all somehow involving “Zangezur Mining” and “Armenian Molybdenum Production”, the companies that Maxim Hakobyan and his two sons were associated with. In the same year, the shares of “Zangezur Mining” owned by Hakobyan and his sons went to “Moon Metals” CJSC, a company with a charter capital worth 12.3 million drams. As evidenced by the State Register of Legal Entities, Moon Metals had two shareholders, Suren Atsikyan and Armen Antikyan. The latter is an old acquaintance of former president Serzh Sargsyan’s son-in-law Mikayel Minasyan. He is also one of the close relatives of Levon Arevshatyan, the person that manages Mikayel’s businesses. Armen Antikyan is the brother of Anahit Antikyan, former advisor to the Prime Minister.

“Armenian Molybdenum Production” was reorganized in that very same year into a new company called AMP Holding owned by Star Dust CJSC. And just like in the case of “Zangezur Mining”, the shares of “Armenian Molybdenum Production” owned by Karen Karapetyan and Maxim Hakobyan’s son were transferred to Avetik Hovikyan and Julietta Darchinyan. The latter was once the manager of one of the restaurants of the Jazzve chain, as well as an operations manager at Distremex, a tobacco import business. Both companies used to belong to Mikayel Minasyan. Avetik Hovikyan is the managing director of “Sur Yev Aspar” LTD, whose shareholder is Vahe Hakobyan, former governor of Syunik, presently a parliament member from the “Hayastan” opposition faction (must not be confused with Maxim Hakobyan’s son Vahe Hakobyan).

This disposition of shares in the enterprise gained momentum after the revolution when Nikol Pashinyan and his team came to office. As mentioned earlier, Zangezur Mining, the owner of 12.5 % of the Combine’s stock, was transferred from Maxim Hakobyan and his affiliates to Moon Metals in 2017. One of its shareholders is a close acquaintance of Mikayel Minasyan, former ambassador of Armenia to the Holy See. In 2018, Moon Metals acquired a new shareholder- a Cyprus registered company called Walnort Finance Limited, again owned by a silent figure- Swiss citizen Jean Paul Buffet.

A surprising fact about Walnort Finance Limited is that there was another company in Cyprus registered under the same address that had the same directors- Triendotto Investments Limited. The company was owned by Armen Vanetsyan and Karen Vanetsyan, the two cousins of Artur Vanetsyan, ex-director of the National Security Service who came to office after the revolution.

He is currently the leader of the opposition faction “With Honor”. Vanetsyan had spoken about this soon after his resignation denying his stockholding in the Combine. He had then announced that “Prime Minister Pashinyan knows very well what has happened. All changes in the company’s shares have been made with his full knowledge.” Jean Paul Buffet retained his shares through Walnort Finance Limited until 2020. In 2020, Walnort Finance Limited acquired a new owner- Mikhail Zurabov, former ambassador of Russia to Ukraine, as well as former Minister of Health and Social Development of Russia.

It is worth mentioning that Zurabov is one of the members of the board of directors in the Exoil group of companies owned by Karen Vanetsyan and Armen Vanetsyan. The former is also a member of the board. Exoil Group is registered in Switzerland. It is made up of 4 different companies specializing in the production and processing of sunflower and vegetable oil. The group also includes the transportation and logistics company AB Trans. Up until now, 12.5% of the company’s stock belongs to Zurabov through Zangezur Mining and Walnort Finance Limited.

Julietta Darchinyan and Avetik Hovikyan, the owners of AMP Holding, the company holding the other 12.5% of the Combine, soon alienated their stocks to 3 different persons – Mher Poloskov, the Combine’s former managing director, Karen Hakobyan, the brother of Vahe Hakobyan, former governor of Syunik who is currently a PM from the opposition, and Narek Ambaryan, the brother of Tigran Ambaryan, former deputy military prosecutor of Armenia. And so, 12.5 % of the company’s shares is divided between these 3 persons.

In 2017, the shares owned by Maxim Hakobyan and his family were acquired by the individuals and companies associated with Mikayel Minasyan, former ambassador of Armenia to Vatican and son-in-law of Armenia’s former president Serzh Sargsyan. The following year, soon after the 2018 velvet revolution, a company called Walnort Finance Limited registered in the same address as the company owned by the cousins of Artur Vanetsyan, the Head of Armenia’s National Security Service appointed by Pashinyan himself, purchased 12.5% of the Combine’s shares. These shares were soon passed to Russia’s former Minister of Healthcare and Social Development Mikhail Zurabov.

The Share Purchase Deals in 2020

Another major change happened in the Combine in 2020. “Zangezur Copper Molybdenum Combine” CJSC bought back from the German Cronimet the 75% it had acquired earlier- the lion’s share of the company’s stock estimated to be worth 42 billion drams. This disposition of shares in the company’s capital structure remained unchanged until September 30 of this year.

The 75% of the company’s stock previously owned by Cronimet had now been bought back and belonged exclusively to the Combine. The 12.5% was shared between Mher Poloskov, Narek Ambaryan and Karen Hakobyan through AMP Holding. The third shareholder, with a portion slightly smaller than that of AMP Holding- 12.4%- was Zangezur Mining owned by Mikhail Zurabov. AMP Holding’s lucky precedence over its associate qualified it for having a voice in making decisions. It is worth noting that according to the legislation, the shares reacquired by the CJSC must either be repaid or distributed (i.e., sold to another person).

Earlier this year, Zurabov filed a lawsuit against the Combine and AMP Holding and at his request, even an interim remedy was applied and the court imposed a ban on the 75% of the stock. Zurabov demanded that the court invalidate the purchase of the 75% by the Combine and alienate the shares to him with pre-emptive right. In addition, he had filed another lawsuit demanding the shares owned by AMP Holding to be alienated to him if and when sold. Both cases have been brought to court.

The regulation obliging the reacquired shares to be repaid or distributed within 1 year established the grounds for the largest redistribution of the combine since 2004.

25% of the Combine’s shares are donated to the Prime Minister’s office.

On September 30, the website where the decrees of the government of Armenia are published posted news that Moscow-based Industrial Company JSC had acquired 60 percent of Zangezur Copper and Molybdenum Combine’s stock, of which 25% will be donated to the Prime Minister’s Office. The government has gladly accepted the “gift”. For the deal to be completed, the ban on the Combine’s 75% had to be removed. This was taken care of on that very same day, on September 30, in the court of general jurisdiction of Syunik region. In just one day, they managed to release the ban imposed on the shares, to settle the purchase of 60% of the company’s shares and, by the evening, effectuate the donation granted to the government.

CivilNet had previously sent the Combine a written inquiry asking for the sale and purchase agreement of the 60% of the shares. The company’s managing director Parag Johannes Bhatt refused to provide it claiming it is a trade secret. The 25% gift donated to the government is in fact 15% of the Combine’s total shares. CivilNet asked government to provide the contract of the deal, but its request was turned down with the same justification- “It is a trade secret!”

The owner of “Industrial Company” JSC is Russian billionaire Roman Trotsenko, who has already spared the time to personally meet with Nikol Pashinyan. According to Forbes’ estimates, Totsenko’s net worth is 2.4 billion dollars. He is the owner of Aeon Corporation which comprises 16 airports, construction companies, shipbuilding companies and yacht manufacturing companies. One of his other assets is the company GeoProMining Gold. The company owns the Sotk gold mine, part of which went under Azerbaijan’s control after the 2020 Nagorno-Karabakh war. Agarak Copper Molybdenum Combine also belongs to this corporation. And Just a few days ago, Hetq wrote that Trotesnko’s GeoProMining also wants to get hold of the Meghradzor gold mine, the fourth largest metal mine of the country.

The government of Armenia seems to be very satisfied with the deal. According to Prime Minister Nikol Pashinyan, the purchase of the combine must not be regarded as a shady deal. “First of all, it promises a copper smelting plant. Second of all, it entails the construction of a new nuclear power plant. GeoProMining will take care of the investments required for the construction of the smelting plant. Its responsibilities are clearly stated and will continue to be as such. The company has already started the negotiations over the nuclear power plant,” said Pashinyan when speaking on new investments.

The government of Armenia managed to obtain 15% of the stocks of Zangezur Copper Molybdenum Combine. This will allow it the membership in the company’s board of directors, as well as representation at the shareholders’ meetings. Vahe Hakobyan’s brother, Narek Ambaryan and Mher Poloskov still own 12.5% of the company’s shares through AMP Holding, while Mikhail Zurabov has only 12.4% at his disposal. Roman Trotesenko came to replace the former oligarchs as a majority shareholder.

Trostsenko’s acquisition of the shares provoked a great deal of controversy. Mikhail Zarubov, the owner of 12.5% of the Combine’s shares, deemed the deal illegal, demanding the remaining 75% of the shares to be alienated to him by pre-emptive rights. Since the moment that Trotsenko entered the game, the company lost its say in the decisions concerning Pashinyan’s political rivals. In the meantime, the Combine and the Government persistently refuse to provide the contract and the size of the deal.

Mkrtich Karapetyan
Gevorg Tosunyan

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This fact-checking article was prepared within the framework of the “Media literacy for the disadvantaged in society” project implemented by DVV International Armenia and Public Journalism Club with the support of the German Ministry of Foreign Affairs.