By Ruzanna Stepanian
The owner of a coffee packaging company locked in a bitter dispute with the government returned to Armenia and was swiftly arrested early on Wednesday less than three months after being cleared of fraud charges and released from jail.
Gagik Hakobian, the leading shareholder in the Royal Armenia company, interrupted his reported medical treatment in Spain and flew back to Yerevan to risk a lengthy prison sentence sought by the Armenian customs and law-enforcement authorities.
The latter insisted on their controversial accusations even after Hakobian and a senior company executive, Aram Ghazarian, were sensationally acquitted by a Yerevan court on July 16. The two men had been jailed two years ago after publicly accusing senior customs officials of corruption.
The Royal Armenia case is widely seen as a litmus test of rule of law and judicial independence in Armenia. The company and its lawyers say the government’s handling of the case makes a mockery of its declared efforts to create a level playing field for all businesspeople and to make courts more independent.
Hakobian was detained by police at Yerevan airport immediately after disembarking from the plane. “He arrived in high spirits and was prepared for his arrest,” his defense attorney, Ashot Sargsian, told RFE/RL. “He had his shaving kit, towel, toothpaste and other hygiene items on him.”
Armenia’s Court of Appeals issued an arrest warrant for Hakobian last month after he failed to attend any of its hearings on an appeal filed by prosecutors against the July verdict. The businessmen assured the court from Spain that he did not flee the country and will return home soon.
Hakobian, according to his lawyer, hoped to be present at the next court hearing that was scheduled for Wednesday. However, the high court adjourned it until October 15, citing trial prosecutors’ failure to attend the session.
The prosecutors were spotted in the court building shortly afterwards, though. Pressed by journalists, they claimed to have accidentally arrived late.
Sargsian claimed that the hearing was cancelled deliberately. “The court knew in advance that the prosecutors will turn up late today and adjourned the session to make sure that Gagik Hakobian is kept in detention until October 15,” he said. “The judge [presiding over the trial] will probably relish that.”
In a phone interview with RFE/RL last week, Hakobian stood by his view that the criminal case was “fabricated” in retaliation for Royal Armenia’s refusal to give bribes to senior customs and public exposure of rampant corruption within the State Customs Committee (SCC).
The SCC is headed by Armen Avetisian, a figure close to Prime Minster Serzh Sarkisian and reputedly one of Armenia’s wealthiest men. His deputy Gagik Khachatrian is also believed to have extensive business interests. The Royal Armenia owner alleges that Khachatrian personally offered to give his company privileged treatment in return for sharing in its extra profits.
Khachatur Sukisian, a millionaire businessman and parliamentarian, publicly accused Khachatrian of obstructing free enterprise and fair competition in the country. “When it comes to competition, that person will trump up everything to make life hard for local, Diasporan or any other businessmen,” Sukiasian charged at the time.
Both Avetisian and Khachatrian have denied the Royal Armenia allegations, saying that it is the coffee company that broke the law by avoiding paying more than 1 billion drams ($3 million) worth of taxes and import duties.
However, a Yerevan court of first instance found the accusations of tax evasion and other fraud leveled against Hakobian and Ghazarian baseless, rejecting prosecutors’ demands that the two men be sentenced to 12 and 11 years’ imprisonment respectively. The defendants walked free in the courtroom as a result.
Their acquittal was a rare instance of an Armenian court rebuffing prosecutors. The judge who handed down the ruling, Pargev Hovannisian, is now facing disciplinary action, ostensibly unrelated to the Royal Armenia case, and the possibility of dismissal. The Council of Justice, a body overseeing the Armenian judiciary, is to decide by next week whether to ask President Robert Kocharian to fire Ohanian or sanction him otherwise.
(Photo courtesy of "Haykakan Zhamanak" daily: Gagik Hakobian pictured during his trial.)