Wednesday, July 20, 2005

RFE/RL Armenia Report - 07/19/2005

Senior Official Linked To Plush Yerevan Hotel Resigns

By Ruzanna Khachatrian and Emil Danielyan

A senior Armenian government official resigned on Tuesday following press reports identifying him as the owner of a newly built luxury hotel in Yerevan.

Deputy Minister of Transport and Communications Hayk Chshmaritian provided a confusing and bizarre explanation for the move, saying that it will guarantee continued foreign investment in Armenia. `I tendered my resignation so that investments in the Republic of Armenia continue,' he told RFE/RL.

Chshmaritian refused to specify just how his presence in the government could hamper those investments. He said only that he will issue a written statement explaining that. Asked whether he was forced to quit over the hotel-related reports, he said, `No, my resignation is connected with foreign investments.'

Chshmaritian, whose brother Karen is Armenia's minister of trade and economic development, was a little-known individual until last May's inauguration of the new five-star hotel called Golden Palace. Its opening ceremony was personally attended by President Robert Kocharian.

The extremely expensive property formally belongs to a company registered in Cyprus. The Yerevan weekly `168 Zham' quoted Chshmaritian last month as saying that he is its principal shareholder. Asked by the paper how he managed to raise millions of dollars spent on the hotel's construction with his modest salary, the official replied, `It's my problem.'

However, Chshmaritian on Tuesday firmly denied any connection with the hotel. `I didn't say such a thing,' he claimed. `I don't even know that paper and never gave it interviews.'

Golden Palace was built in one of Yerevan's largest public parks that has shrunk considerably as a result. The fact that it was allowed to be built in such a location is extraordinary in itself and suggests that powerful individuals are behind the business.

The construction took about five years and is known to have been overseen by Armen Avetisian, the controversial chief of the Armenian customs close to Defense Minister Serzh Sarkisian. The latter was seen visiting and inspecting the hotel last month.

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