Commission Calls ArmenTel’s Privatization Illegal

YEREVAN (Noyan Tapan)–ArmenTel’s activities and privatization do not correspond with Armenia law–an interim commission on ArmenTel announced. The establishment of ArmenTel was the cooperative effort of Trans World Telecom and the Ministry of Communication of Armenia–and its future activities conflict with numerous legislative acts of the Republic of Armenia.

According to a report issued Tuesday by the commission’s head David Vardanian–Articles 5 and 8 of the Constitution of the Republic of Armenia have been broken.

TWT was set up to gain great profits in the communications industry of Armenia without having to make any major investmen’s–Vardanian said. Trans World Company president Barry Hon–an Orange County–Calif. real estate developer developed this idea after visiting Armenia in 1991. The commission found that Armenia’s ex-minister of communication Grigor Poghpatian assisted in the implementation of Hon’s program. In effect–Poghpatian restricted free competition in telecommunications–Vardanian said.

Poghpatian was able to carry out his activities in the absence of government control during the reign of ex-president Levon Ter-Petrosyan and ex-prime minister Hrant Bagratian. Bagratian has said that he was unaware of the ongoings in the communications sphere and that the government did not make any decisions in that regard. Poghpatian–however–claims his actions had been approved by the government. After consultations with lawyers–the commission concluded that the government consented in the form of protocols–which have no legal credibility.

The commission found that TWT’s monopoly allowed the company to derive immense profits without making any serious investment and failing to serve its commitmen’s. According to Vardanian–TWT invested $11 million after the privatization of ArmenTel and gain even greater profits which could have been directed to Armenia. The commission found no violations in the sale of 90 percent of ArmenTel shares to OTE of Greece.

Vardanian said the commission’s findings will enable the Armenian government to sue TWT for illegally embezzled sums.

A Yerevan court resumed proceedings on Monday into the Armenian government’s lawsuit against the Greek owner of the ArmenTel telecommunication monopoly and its former US shareholder–rebuffing the Americans’ claim that Armenian courts are not eligible to consider the case. An American lawyer representing the US Trans-World Telecom warned that the court’s stance calls into question key terms of ArmenTel’s takeover by Greece’s state-controlled firm OTE.

The government last month sued TWT and OTE for some $17 million in what it claims is unpaid corporate tax.

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