By Karine Kalantarian
The Greek telecommunications giant OTE has agreed to pay heavy fines imposed by the Armenian government to avoid the confiscation of some of its shares in the ArmenTel monopoly, officials said on Friday.
The Justice Ministry said OTE transferred about 1.5 million to the state treasury in payment for the government’s legal counseling expenses, incurred during an ArmenTel-related litigation at the London-based International Court of Economic Arbitration in 2000, and related fines.
The Armenian authorities claim that the Greeks had agreed to cover those expenses as part of a settlement of the court action also involving ArmenTel’s former U.S. shareholder. However, they refused to pay up even after several Armenian court orders, prompting the government to impose an official hold on $1.5 million worth of OTE shares in the Armenian telecom operator. The Justice Ministry was scheduled to sell them to the highest bidder on Saturday.
The ministry called off the auction on Friday, saying that OTE, which owns 90 percent of ArmenTel, “has fully complied” with the court rulings. “OTE’s debt was fully proven and if OTE had acted in accordance with the law, it would have saved a substantial sum,” the ministry said in a statement.
The settlement followed the scandalous sacking last week of ArmenTel chief executive Nikos Georgoulas who was accused by the Armenian government of mismanaging the company. OTE has not yet named a replacement for Georgoulas.