GILD ARBITRAGE IN SPOTLIGHT DUE TO "HETQ" INVESTIGATIVE ARTICLE

economy
2009/08/26 | 15:52

Today’s issue of the Baltic Business News, picks up on an article that
appeared in last week’s edition of "Hetq" in which Chief Editor Edik
Baghdasaryan raises questions regarding the claim of GILD Arbitrage
Risk Capital Fund that it has invested 20 million Euros in the Armenian
mining sector. (See: Fact or Fiction? – GILD Arbitrage Risk Capital
Fund Claims 20 Million Euro Armenian Investment). The BBN article,
entitled GILD’s Armenian Letters, is as follows.

Hedge fund GILD Arbitrage refuses to disclose the companies which
have mining licence in Armenia and where they have invested EEK 300
mln of Estonian business leaders’ money through Melorama Holding,
a holding company registered to Cyprus, Äripaev reports.

Edik Baghdasaryan, an Armenian journalist, who investigated the
matter, said that Melorama Holding isn’t one of the direct owners
of mining companies. GILD says that there are about 30 companies in
Melorama group.

Investment to Armenian mining permits is third of fund’s total volume,
according to last year’s report.

Tõnno Vahk, the fund manager, don’t want to disclose the investments,
first due confidentiality agreement and secondly the investment isn’t
publicity’s, but investors’ matter.

Allan Martinson, one of the investors, doesn’t agree.

"I’ve heard rumors that there are disputes in Armenia, who owns the
licences in the fund’s portfolio. I want clarity whether the licences
exist at all," Martinson said.

"Is it a fact or fiction?" asked Edik Baghdasaryan, an investigative
journalist asked last week in portal Hetq Online.

He invested if and which licences for earth deposits does GILD have
through Melorama Holding.

"Melorama Holding doesn’t exist in the lost of owners of Armenian
mining companies," the government said in a letter to Baghdasaryan.

He added that this means Melorama’s subsidiaries haven’t been
registered in the mining area.

GILD explained that Melorama is a big group and doesn’t directly own
a single company in Armenia

GILD refused to publish the names of subsidiaries which are registered
to Armenia and have mining licences there.

Baghdasaryan writes in his article in Hetq Online that although
last year Armenia got investments for EEK 10 mln from Cyprus then
not a penny of it moved to the mining sector, according to local
statistics office.

GILD’s explanation is identical to previous one – since they invest
to mining through Armenian companies then it won’t leave a trace
to Cyprus.

Rain Tamm, managing partner of GILD Partners said that they invested
to Armenia by choice. This area was attractive in the spring of last
year and Armenian mining laws are vanwarder than in Estonia.