Armenian tax authorities, however, fined the company in November 2007, finding that the violation allowed Bjni to use larger amounts of water than was shown in documentation.
The action was part of a broader crackdown on Bjni and several other SIL group companies that were raided by tax officials and accused of large-scale tax evasion shortly after MP Khachatur Sukiasian voiced support in September 2007 for former President Levon Ter-Petrosian’s bid to return to power. The tycoon was among several Ter-Petrosian associates who fled the country to escape arrest following the February 2008 presidential election.
The Bjni mineral water plant was auctioned off by the government earlier this year after its owners’ failure to pay 5.2 billion drams ($14 million) in fines imposed for alleged tax evasion.
Armenia’s Administrative Court annulled the auction in March, saying that the authorities cannot forcibly sell the company unless it is declared bankrupt by another court. Bjni has since been going through bankruptcy proceedings and facing an uncertain future.
The Sukiasian family, which denies the tax fraud charges as politically motivated, has tried unsuccessfully to have Armenian courts overturn Bjni’s seizure. Earlier this month, the Sukiasian business group asked the European Court of Human Rights to award it 214 million euros ($304 million) in compensatory damages for the effective confiscation of Bjni by the Armenian government.
In the dispute with the Environment Ministry, according to the company’s lawyer, the court should have challenged the inspector over the improperly installed and sealed water metering device.
Arsen Petrosian, deputy head of the Ministry’s State Environmental Inspection, told RFE/RL that a group of experts headed by him conducted inspections from February 2006 to December 2007 and found that water meters installed at Bjni allowed the company to borrow more water than it was allowed it and “a corresponding protocol was drawn up.”
Petrosian said, however, that if there is evidence suggesting that a ministry inspector was responsible for this installation, “this inspector should give explanations. Perhaps he will answer.”