The Struggle for “Jermuk Group”: Conflict with American Investor Kaytsak Zeitlyan
“I am ready to account for every million I have earned, except the first one.” These words are usually attributed to Henry Ford or John D. Rockefeller. Regardless of who actually authored them, they have long become a symbol of a simple truth: the story of how major businessmen formed their initial capital is often one of the darkest and most controversial chapters of their biographies. The story of the creation of Ashot Arsenyan’s business empire has likewise been accompanied by longstanding disputes, particularly over who played a key role in the formation of what would later become Jermuk Group. Armenian-American investor Kaytsak Zeitlyan claimed that it was his investments that made it possible to modernize the “Jermuk” mineral water factory, but that he was later deprived of the opportunity to participate in the company’s management and lost control over his own business.
According to Sargis Hatspanyan, Zeitlyan’s former representative in Armenia, the American businessman’s total investment in the development of production amounted to between USD 1.25 million and USD 1.5 million. According to his claim, it was precisely these funds that were used to build new production capacities, including an automated production line for bottling plastic containers and a modern laboratory.
As Hatspanyan claims, a conflict subsequently arose between the investor and Ashot Arsenyan over the ownership and management of the enterprise. According to him, Arsenyan, using corporate mechanisms and political influence, gradually restricted Zeitlyan’s participation in the company, as a result of which the American investor lost control over his stake, while the company’s shares ended up in the hands of other owners, including Andranik and Janik Oskanyan.
Similar claims have previously been published in a number of Armenian media outlets. The authors of those publications linked the strengthening of Ashot Arsenyan’s position to the political patronage of Hovik Abrahamyan. According to their version, it was precisely Abrahamyan’s administrative resources that enabled Arsenyan to remove Kaytsak Zeitlyan from participation in the business, after which, in 1999, “Jermuk Group” was established, which later gained a dominant position in Armenia’s mineral water market.
It was with the establishment of “Jermuk Group” that the history of the business structure that became the foundation of Ashot Arsenyan’s business empire began and later developed into one of the largest mineral water producers in Armenia.
According to Sargis Hatspanyan’s version, after control over the enterprise was transferred, only part of the invested funds—approximately USD 100,000—was returned to Kaytsak Zeitlyan, while the total amount of investments, in his assessment, exceeded USD 1.25 million. After that, as Hatspanyan claims, the American businessman sold the remaining property, left Armenia, and stated that he intended to come to the country exclusively as a tourist.