An investigation by the State Oversight Service into the 2003 privatization of Energachap CJSC identified problems concerning the justification for selecting the winning bidder, compliance with competitive tender conditions, and fulfillment of the buyer’s obligations.
In particular, despite the clear advantages of the competing bidder’s proposal, a company owned by a person affiliated with K. D., former chairman of the board of directors of Electric Networks of Armenia CJSC (ENA), was declared the winner under circumstances that remain unexplained.
E. G., who served as ENA’s director at the time, actively intervened in the winner selection process. As a result, the buyer received an advantage not provided for under the tender conditions, affecting the final outcome.
The privatization tender involved Golden Roof LLC and individual entrepreneur S. H. Golden Roof offered to purchase the company’s shares for 98 million drams and invest 380 million drams over three years. By comparison, the other bidder proposed total investments of 1.34 billion drams and a greater number of jobs.
Although the total recorded investments amounted to 380.665 million drams, documentation was unavailable to fully assess how the funds were subsequently spent and whether they were used for their intended purposes.
No supporting documentation was found confirming the settlement of a 1.259 million-dram liability to the founders and participants. At the same time, the contractual minimum monthly salary of 75,000 drams was not ensured for 180 employees.
Part of Energachap’s property has been leased to ENA since 2004. The total rent calculated for the period from February 16, 2004, to October 1, 2026, amounted to approximately 2.306 billion drams.
Following the monitoring findings, a report detailing the identified circumstances was submitted to the Prosecutor General’s Office of Armenia for appropriate legal assessment and further proceedings in accordance with the law.
