Ten days after inaugurating a new factory in the presence of Prime Minister Nikol Pashinian, the official owner of Armenia’s leading freight and agribusiness company faced on Friday tax evasion charges which he strongly denied.
The State Revenue Committee (SRC) said that the Spayka company evaded over 7 billion drams ($14.4 million) in import taxes as it asked a court in Yerevan to allow the pre-trial arrest of Davit Ghazarian.
In a statement, the SRC said that the accusations stem from large quantities of cheese and agricultural produce which were imported to Armenia by another company, Greenproduct, in 2015 and 2016. It claimed that Greenproduct is controlled by Spayka and that the latter rigged its customs documents to pay less taxes from those imports.
The court held hearings on the SRC demand later in the day. Ghazarian’s lawyer, Karen Sardarian, told reporters that the court will announce its decision on Monday.
Ghazarian angrily denied the accusations and accused the authorities of “paralyzing” his company’s operations at a news conference held before the court hearings. He insisted that Spayka is not connected to Greenproduct and has only carried out cargo shipments for it.
The businessman said that she was charged because he refused to pay Greenproduct’s back taxes after being summoned to the SRC late on Thursday.“They told me, ‘Either you will sign [a relevant document] or be arrested,’” he claimed. “I view this as Spayka’s persecution by the SRC … because nobody from Greenproduct is willing to pay up.”
Ghazarian implied that Pashinian had a hand in the criminal charges brought against him. “He [the SRC chief] went to the boss and told him that we owe 7 billion drams,” he said. “The boss, our prime minister, whom we all respect, said that ‘if they owe the money then they must pay it.’”
As recently as on March 26, Pashinian visited Spayka’s sprawling premises in Yerevan’s southern Noragavit suburb to attend the inauguration of a state-of-the-art dairy factory built there. Ghazarian showed him around the facility.
A March 26 statement by the prime minister’s office gave details of the $15 million business project. “120 new jobs have been created under the project,” it stressed.
Ghazarian said that Spayka planned to invest another $100 million this year. The Kazakhstan-based Eurasian Development Bank (EDB) has already frozen planned funding for the project because of the tax fraud case, he said.
Spayka was set up in 2001 and has since become Armenia’s leading producer and exporter of fruits, vegetables and some prepared foodstuffs. The company currently employs more than 1,200 people mostly working in its greenhouses and buys produce from thousands of Armenian farmers. It also has a large fleet of heavy trucks.
Ownership of Spayka has long been a subject of Armenian media speculation. Some media outlets have linked it to the family of former President Robert Kocharian and his successor Serzh Sarkisian’s son-in-law, Mikael Minasian. Ghazarian again asserted on Friday that he is the company’s sole real owner and has no “business relationship” with Minasian.
Spayka was already fined about 2.5 billion drams ($5 million) for profit tax evasion in July last year, two months after Sarkisian’s resignation and Pashinian’s rise to power. The company agreed to pay the fine at the time.
Ghazarian claimed on Friday that that SRC penalty was also unfair and that he agreed to pay it in order to have Spayka’s bank accounts unfrozen.