ArmenTel, Government Again Trade Accusations

The Armenian government and the Greek management of the ArmenTel operator traded on Tuesday fresh mutual accusations of violating contractual obligations stemming from the 1998 privatization of the telecommunications monopoly.

Each side presented the other with a list of demands and grievances at an “open meeting” initiated by the government in an attempt to address their deepening disagreements. The meeting ended without any agreement, however.

Armenian officials led by Justice Minister David Harutiunian again demanded a $167,000 financial compensation for ArmenTel’s refusal to allow a third-party audit of its books. Harutiunian said the government is allowed to initiate such an inspection under the terms of ArmenTel’s sale to the Greek telecom giant OTE.

But ArmenTel chairman Vasilis Maglaras accused the authorities of obstructing OTE’s operations and not enforcing its 15-year exclusive rights to all telecom services in Armenia. An angry Maglaras said the authorities themselves owe his company $5 million before walking out of the meeting in protest.

However, ArmenTel’s chief executive, Georgios Vasilakis, chose to stay on, signaling his readiness to allow a British firm contracted by Yerevan to audit the telecom monopoly. He complained that the government did not officially notify ArmenTel of its audit plans, blaming his recently sacked predecessor, Nikos Georgoulas, for the misunderstanding.

Harutiunian and other officials, for their part, dropped threats to revise ArmenTel’s operating license, insisting only on the payment of the fine.

OTE, seeking to avert the confiscation of some of its ArmenTel shares, has already agreed to pay $1.5 million in fines imposed by the Armenian in a separate dispute.