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Government To Sell Luxury Resort ‘Donated’ By Former Official


Armenia - The Golden Palace hotel complex in Tsaghkadzor.

The Armenian government formally decided on Thursday to auction off a luxury hotel handed over to it by a former senior official facing a corruption investigation.

The Golden Palace hotel located in the resort town of Tsaghkadzor used to belong to Armen Avetisian, a former chief of the Armenian customs service, and his family. They offered to donate it to the state in November last year after the National Security Service (NSS) moved to prosecute Avetisian for illegal entrepreneurship and money laundering.

The NSS claimed in October 2018 that Avetisian funded the construction of a similar five-star hotel in Yerevan when he headed the State Customs Committee (SCC) from 2001-2008. The financing was carried out through an obscure company registered in Cyprus and falsely presented as foreign investment, it said.

In February this year, the then NSS director, Artur Vanetsian, said that the Tsaghkadzor hotel’s transfer to the state is “in progress.” The government completed that process in September.

At a weekly session chaired by Deputy Prime Minister Tigran Avinian, the government made a final decision to sell the hotel and almost 1.4 hectares of land surrounding it at auction. It tentatively scheduled the first auction for December 19, with Avinian inviting bids from all interested businesspeople.

The property, which also had a casino, is currently valued at over 7.5 billion drams ($15.8 million). The government will hold up to three more auctions if it fails to attract buyers ready to meet its asking price. The price would be cut by 5 percent after every failed auction.

Avetisian faced corruption allegations by opposition figures and media throughout his tenure. The NSS launched the investigation into the former customs chief shortly Vanetsian alleged that former President Robert Kocharian and his family accumulated hundreds of millions of dollars’ worth of assets when he ruled Armenia from 1998-2008.

Kocharian dismissed the allegations, challenging law-enforcement authorities to prove them. In an August 2018 interview, he also insisted that Avetisian did not make a huge personal fortune while in office.

The Armenian customs service solidified its reputation as one of the country’s most corrupt government agencies when it was run by Avetisian. The latter developed reportedly extensive business interests.

Serzh Sarkisian sacked Avetisian shortly after he succeeded Kocharian as president of the republic in April 2008. Just one week after taking office, Sarkisian accused customs officials of abetting smuggling to illegally enrich themselves and penalizing importers refusing to pay kickbacks. Even so, corruption within the customs service remained widespread during his rule.

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