KOCHARIAN, SARKISIAN DENY HARASSING PRO-OPPOSITION TYCOON
By Ruzanna Khachatrian and Ruzanna Stepanian
Radio Liberty, Czech Rep.
Nov 14 2007
President Robert Kocharian and Prime Minister Serzh Sarkisian denied
on Wednesday any political motives behind the Armenian government’s
controversial crackdown on a wealthy businessman supporting former
President Levon Ter-Petrosian.
Both men claimed that tax authorities have been inspecting companies
owned by Khachatur Sukiasian only because the latter has grossly
understated their revenues to evade taxes. Kocharian said the State
Tax Service (STS) will soon publicize proof of how Sukiasian has
"deceived the Republic of Armenia."
"There are people who understand that the state has adopted an
anti-corruption strategy and is consistent," Kocharian told reporters
after opening an annual exhibition of goods produced by Armenian and
foreign firms. "There are also people who do not want to reduce the
shadowy segment of their business and are trying to politicize the
matter, make noise and, to put it bluntly, become hysterical in order
to pay less money to the [state] budget."
"That hysteria will not do them any good," he warned.
Sarkisian, for his part, insisted that the government actions against
businesses making up Sukiasian’s SIL Group are a "very ordinary
inspection" which every company operating in Armenia undergoes on a
regular basis.
Speaking in parliament, he deplored the growing outcry sparked those
actions. "Do you think that a person must not be taxed just because
he is engaged in politics?" he asked an opposition lawmaker.
Tax inspectors, joined by officers of a feared police unit tasked
with combating organized crime, began raiding the offices of
Sukiasian-controlled companies last month following the tycoon’s
public endorsement of Ter-Petrosian’s bid to unseat the current
Armenian leadership and return to power. The most recent such raid
was reported on Tuesday.
The STS has already accused a Sukiasian-owned pizza restaurant chain
and printing house of evading a combined 1.36 billion drams ($4.25
million) in taxes. One of their chief executives is currently under
arrest pending investigation.
In an interview with RFE/RL last week, Sukiasian denied the tax evasion
accusations, saying that they were fabricated in retaliation for his
long-standing support for Ter-Petrosian. The ex-president and his
opposition allies have also condemned the crackdown as being part of
"repressions" unleashed against their supporters by the authorities
ahead of next February’s presidential election.
There are indications that Western governments are also worried about
political implications of the affair. A spokeswoman for SIL Group
told RFE/RL that Steven Banks, the number two diplomat at the U.S.
embassy in Armenia, visited Sukiasian to discuss the situation on
Wednesday. The embattled tycoon has reportedly also received other
Western diplomats in Yerevan in recent days.
Sukiasian is the only millionaire businessman who has thrown his weight
behind Ter-Petrosian’s presidential bid. Virtually all other local
"oligarchs" are loyal to Kocharian and Sarkisian. Many are affiliated
with Sarkisian’s Republican Party (HHK).
Kocharian insisted that the government moved against SIL Group as
part of a toughening of its stated fight against the huge informal
sector of the Armenian economy. "As you know, we are pursuing a
much more consistent tax policy towards all companies," he said,
answering a question from RFE/RL. "All businessmen, whether they are,
as you say, pro-government or in opposition, are being brought into
the taxation field."
"At the end of the year we will publish the list of the large
taxpayers and you will see by how much everyone has increased their
tax contributions," he added.
Sarkisian likewise cited a "toughening of the government’s tax policy"
towards all businesses. "That is the first precondition for creating
a level competition field," he said, answering a question from Anahit
Bakhshian, an opposition parliamentarian concerned about the crackdown.
"I would love to trust in your every word. But unfortunately, Mr.
Prime Minister, reality testifies to something else," responded
Bakhshian.
Even though many Armenian companies are believed to routinely
underreport their earnings, SIL Group is the only major economic
entity targeted by the tax authorities so far. Sukiasian’s business
interests, although extensive, do not encompass the most lucrative
forms of economic activity that have been effectively monopolized by
other, even wealthier businessmen close to Kocharian and Sarkisian.
Modest taxes paid by those businessmen continue to contrast with
their conspicuous wealth.
Sarkisian assured Bakhshian that his wealthy friends and allies do not
evade taxes, urging her to examine the list of the country’s leading
corporate taxpayers regularly published by the STS. A newspaper
reporter told him afterwards that one of Armenia’s two big cement
plants owned by Mikael Baghdasarov, one of the country’s richest men
reputedly operating under the powerful premier’s tutelage, is currently
not listed even among the 500 largest taxpayers. Sarkisian responded
by claiming that he has never had close ties with Baghdasarov.