Armenian government gained no profits from ZCMC stake in two years, hides behind private company

After acquiring a stake in the Zangezur Copper Molybdenum Combine (ZCMC), the Armenian government has gained no profits from its shares although the mining enterprise is listed among Armenia’s top taxpayers, Pastinfo reports.

On 30 September 2021, the Industrial Company JSC, a wholly owned subsidiary of Russian billionaire Roman Trotsenko’s GeoProMining Gold, acquired 60% of ZCMC and immediately donated a quarter of that stake to the Armenian government in a shady and potentially corrupt business deal. The government currently owns around 21% of the ZCMC shares.

Pastinfo submitted a query to the State Property Management Committee, asking to disclose its profits after the transfer of the ZCMC stake to the Armenian government and profits made by its other shareholders, as well as whether any redistribution of profits was carried out in 2022 and 2023 and how much profit the government gained as a stakeholder.

“If the profits were not distributed, could you give any reason for it and explain how the profits were used?” the media outlet added.

“Surprisingly, the State Property Management Committee acted as a private company and refused to provide information, sending to Pastinfo a response from the ZCMC deputy director which said the company had no obligation to provide information,” Pastinfo reported

“It’s worth noting that the request was addressed to the State Property Management Committee tasked with handling the government’s stake in ZCMC. Article 51 of Armenia’s Constitution, as well as the law on freedom of information, obliges state agencies to share information. We sought information on the government's profits, however it turned out that the government has now assumed the role of a joint-stock company, considering itself a private company or hiding behind a private company, because according to our sources, profit redistribution has not occurred in recent years, and the government, as a ZCMC co-owner, has not gained any revenues, remaining silent on its reasons.

“It is of great concern that a letter signed by the deputy director of a private company is sent in response to a request submitted to a high-ranking official. We know full well how to submit a request to ZCMC and did not ask for the government mediation to reach out to a private company. Such a workstyle of a state agency confirms the allegations that the government has no idea how to handle its shares and to keep them in its hands without any public accountability for the efficiency of their management,” Pastinfo said.