khosq.com

I have just been informed that I will have to pay
Sixty Three Thousand Dollars because the word ‘Armenia’ is used in the name of
the company of which I have been General Director since 2002, the ‘Armenia
Sugar Corporation’. This is an explanation, and possibly food for thought for
others who might want to consider investing in Armenia’s booming economy.

In 2000 I brought a team of more than a dozen
international specialists to Armenia and throughout 2000 and 2001 they carried
out a feasibility study into re-establishment of the Armenia sugar industry.
Sugar has been successfully produced in Armenia since 1948, but the industry
collapsed when the 1988 earthquake destroyed the sugar factory in Spitak.

The feasibility study demonstrated that not only
would a new Armenian sugar industry be financially viable, it would create
thousands of work places in Armenia’s most depressed Shirak and Lori Marzes,
and it would trigger the return of sugar beets, which are highly beneficial in
crop rotation. Since the earthquake, the lands in the Shirak and Lori Marzes
have been used exclusively for potato growing, and that has led to significant
deterioration of the otherwise fertile black soil.

In January 2002, President Kocharian instructed
Hovik Abrahamyan, Minister of Territorial Affairs to head a Government
Commission, which would study three proposals for a new sugar factory. The
commission approved our project and in July 2002 the Armenian – American joint
venture company, the ‘Armenia Sugar Corporation’ (ASC) was established as a
vehicle to build Armenia’s new sugar industry. The ASC continued to work
closely with the Armenian Government, and letters of support were received from
Karen Tschmaritian, Minister of Trade and industry, David Lokian, Minister of
Agriculture, Hovik Abrahamyan, Minister for Territorial Affairs, Merujian
Michaelian, Deputy Minister of Finance & Economy, Serzh Sargsyan, Minister
of Defence and Armenian Representative of the Armenian Russian Commission for
inter-Governmental Development, and yes, a letter from President Kocharian, who
committed his full support to the project.

The Armenia Sugar Corporation investigated
potential investors and eight internationally recognized sugar specialist
companies were found, each of which expressed an interest to participate in the
new sugar industry. The prominent British company Sudeco international limited
was selected as the best and most capable partner, and a team of Sudeco
specialists came to Armenia to study the situation on the ground. Sudeco
specialists spent several weeks in Armenia and Sudeco signed an agreement with
the ASC to invest more than $20 million in the $90 million project. The proposal
was registered at the various ministries and at the American, British and
Russia embassies. Discussions followed with a number of international finance
institutions, several of which expressed their interest to provide the loan
finance for the project; the Lincy Foundation was ready to participate and
provide $10 million, and the USDA expressed an interest to provide finance and
specialists for the major agro-development program needed to re-introduce sugar
beets to the region.

A threat to the new industry was that sugar could
be dumped into the Republic and sold at prices lower than $600 per ton, which
was the retail price of sugar at the time. The poor quality sugar that Armenia
receives from its monopoly supplier could have been sold with a healthy profit
at less than $250, so in accordance with WTO guidelines, the Government
committed to provide protection against that eventuality. The latest technology
and equipment in the new sugar factory was to produce high quality European
standard sugar, which was to retail at considerably less than $600.

By 2003, together with Sudeco International, the
Armenia Sugar Corporation had committed major financial and human resources to
the project, a full business plan had been prepared, in English and in Russian,
and a 62-hectare site was approved for the factory to be built near to Akhurian
in the Shirak Marz. The project was submitted to Tigran Davtian, Deputy
Minister of Trade & Industry (now Minister of Finance), who was to register
the project on behalf of the Government, as per resolution of the Presidential
Commission of January 2002. But Davtian would not even look at the project, let
alone register it so that it could proceed. Davtian said: ‘Bring a Mitsubishi
to me and I might consider an application'. For that reason, and because of
repeated rebuffs by the Armenia authorities, to date Armenia does not have a
sugar industry. And despite Robert Kocharian showing off what he promised would
be yet another new sugar factory in the run-up to the recent Presidential
election, he will not allow a new sugar industry, because it would jeopardize
the tens of millions of dollars his man gets each year from cheap, low-quality
imported sugar.

So that brings me back to the Sixty Three Thousand
Dollars the Armenia authorities are now demanding I pay for using the word
Armenia in the ‘Armenia Sugar Corporation’ company name.

Each year, any company that uses the word ‘Armenia’
in its name has to pay a fee of 600,000 Drams (in 2002 about $1,100 - today $2,000).
In 2002 and 2003 the Armenia Sugar Corporation paid the fee; but in 2004, after
Tigran Davtian blocked the project, the ASC refused to pay the fee, arguing that
it was in fact Armenia that was not allowing the new Armenian sugar industry to
be established, and the fee would be paid only on the understanding that the
Government provided the support it had promised.

By 2006, the outstanding annual fees, plus penalties,
had built up to more than 12 million Drams and as General Director I was invited
to attend a court hearing to explain the situation. The court decided to freeze
Armenia Sugar Corporation activities, pending payment of the debt. By the end of
2007, the debt, together with penalties, had built up to more than 19 million
Drams (63+ thousand Dollars). I again explained that the Armenia Government continually
reneged on its promise to provide the support needed to allow the project to
proceed and therefore on principal the ASC would not pay the charge. The court
decided the company should be liquidated, to which the American and Armenian
shareholders agreed.

Today the liquidation is in progress, and I have
been told that, as General Director of the Armenia Sugar Corporation, I was
negligent in my management of the company, and as such I will be obliged to
personally pay the $63,000 charge for the word Armenia.

Since 2003, Armenia’s regime has blocked the ASC
sugar project, a $90 million investment by a prominent international sugar
industry specialist company, which has already committed hundreds of thousands
of dollars to the project, and which is ready to build and manage a new sugar industry
and to create thousands of jobs in Armenia’s most depressed region. Moreover, the
Armenian authorities ignore an alternative Sudeco proposal to invest a similar
amount into a new ethanol industry for Armenia, using sugar beets as the
agricultural feedstock material. That is because Serzh Sargsyan has the fuel
industry under his monopolistic control.

And because I have been pressing for the past eighteen
months to have an investigation carried out into the corruption the World Banks
Roger Robinson has been driving in Armenia since the turn of the century,
together with his Armenian state crony friends, and because I have been
accusing Kocharian and his cronies of stealing billions of dollars worth of
assets that belonged to the Armenian people, today, the same regime has trumped
up a charge to force me to pay Sixty-Three Thousand Dollars, simply because the
company I managed had the word Armenia in its name.

This is the Armenia the World Bank and the
International Monetary Fund have been helping to create since the turn of the
century, and I represent just one in a long line of international investors
that Armenia’s tyrannical regime drives from the Republic.