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Armenian Businessman Freed From Custody


Armenia - Davit Ghazarian, the owner of Spayka company, speaks to journalists, March 26, 2019.

The official owner of Armenia’s largest food exporting company accused of tax evasion has been released from custody after paying the government 1 billion drams ($2.1 million).

In a weekend statement, the State Revenue Committee (SRC) said a prosecutor has decided to set Davit Ghazarian free because there are no longer “grounds” for holding him in detention and because he has made the hefty payment “within the framework of the criminal case.” The statement did not give further details.

One of Ghazarian’s lawyers, Arsen Sardarian, told RFE/RL’s Armenian service that the businessman was released on Friday, just three days after Armenia’s Court of Appeals refused to grant him bail.

Ghazarian’s Spayka company reposted the SRC statement on its Facebook page but did not officially comment on the development as of Monday evening.

Ghazarian was arrested one month ago after the SRC charged that Spayka evaded over 7 billion drams ($14.4 million) in taxes in 2015 and early 2016. The accusations stem from large quantities of foodstuffs which were imported to Armenia by another company, Greenproduct. The SRC says that Greenproduct is controlled by Spayka and that the latter rigged its customs documents to pay fewer taxes from those imports.

Ghazarian has strongly denied any ownership links to Greenproduct. He said on April 5 that the SRC moved to arrest him after he refused to pay the alleged back taxes.

Sardarian told the “168 Zham” newspaper on Saturday that the tax evasion charges against his client have not been dropped and that he might have to make more payments to the SRC. “Calculations still need to be done,” the lawyer said. “The criminal proceedings will end only when they the calculations are over and they reach agreement on that issue.”

Armenia -- A commercial greenhouse belonging to the Spayka company, April 19, 2017.
Armenia -- A commercial greenhouse belonging to the Spayka company, April 19, 2017.

Spayka is Armenia’s leading producer and exporter of agricultural products grown at its own greenhouses or purchased from farmers in about 80 communities across the country. The company employing about 2,000 people also owns hundreds of heavy trucks transporting those fruits and vegetables abroad and Russia in particular.

In a series of statements issued last month, Spayka claimed that because of Ghazarian’s arrest its mainly foreign creditors are withholding further funding for the company. It said it may therefore not be able to buy large quantities of agricultural produce from Armenian farmers this year.

Prime Minister Nikol Pashinian dismissed those warnings on April 9. He said he is confident that the food giant will carry on with the wholesale purchases.

As recently as on March 26, Pashinian attended the inauguration of a cheese factory built by Spayka in Yerevan.

Spayka was already fined about 2.5 billion drams ($5 million) for profit tax evasion in July last year. Ghazarian said before his arrest that he agreed to pay the “unfounded” fine in order to have the company’s bank accounts unfrozen.

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