The businessman, Davit Galstian, protested his innocence as the Court of Appeals opened hearings on his pre-trial arrest which was sanctioned by a lower court earlier this month.
The charges stem from a $1 million contract for the supply of artillery shells which Galstian’s Mosston Engineering company signed with the Armenian Defense Ministry in 2018.
In a February 1 statement, the National Security Service (NSS) said the company breached the contract by providing the ministry with ammunition designed for older and different artillery systems. It said artillery units could not accomplish their “combat tasks” with those shells.
A Yerevan court of first instance agreed to remand Galstian and Mosston’s executive director, Armen Baghdasarian, in custody pending investigation. The suspects asked the Court of Appeals to overturn that decision.
“The court of first instance made an illegal decision,” Galstian’s lawyer insisted after the first Court of Appeals hearing. He said the ammunition sold to the Armenian military “fully corresponded to the requirements of the supply contract.”
Galstian is also facing three other criminal investigations into his companies’ dealings with the military. The NSS has so far released no details of those inquiries.
It remains unclear whether any current or former Defense Ministry officials are also under investigation.
In a written statement issued on Friday, Galstian blamed his “illegal” arrest and prosecution on “interested individuals” who he said what to scapegoat him for Armenia’s defeat in the autumn war in Nagorno-Karabakh. In that regard, he pointed the finger at unnamed individuals who have alleged corrupt practices in the Armenian government’s military procurements.
Former President Serzh Sarkisian made such allegations earlier this week in response to government loyalists’ claims that during his decade-long rule widespread corruption had a severe impact on national security.
Sarkisian charged that before and during the six-week war the current government bypassed the Defense Ministry to buy weapons and ammunition at grossly inflated prices. In particular, he said, it purchased flak jackets for Armenian soldiers for as much as $600 apiece.
A spokesman for Prosecutor-General Artur Davtian told RFE/RL’s Armenian Service on Friday that law-enforcement authorities are looking into Sarkisian’s allegations
The official, Gor Abrahamian, said at the same time that the NSS launched in November an inquiry into the supply of flak jackets. He would not say whether anybody has been charged as part of that probe.