"Hetq": Company Owned by the Vedi Mayor's Maternal Uncle Received AMD 389 Million in Contracts from the Municipality

"Hetq" published an investigation on November 11, 2024 that raises serious questions regarding procurement by the Vedi Municipality, the management of municipal funds, and a possible conflict between the interests of a public official and those of a close relative's business.

According to "Hetq's" publication, the municipality headed by Vedi Mayor Garik Sargsyan signed contracts worth a total of AMD 389 million with "Noyavan" LLC in 2022 and 2023. The company's 100 percent shareholder is Garik Sargsyan's uncle, Grigor Manukyan.

In other words, the company selected for works financed from the community budget and state subvention funds belongs precisely to a close relative of the head of the community.

The figures are quite telling. In 2022, a contract worth AMD 109 million was signed with "Noyavan" for gasification works on the streets of Vedi. On August 30, 2023, another contract worth AMD 280 million was signed with the same company for the construction of drinking water pipelines in the settlements of Vanashen, Sisavan, Goravan, Shaghap, and Ginevet. The total value of the two contracts amounted to AMD 389 million, approximately one million dollars.

ONE COMPANY, MULTIPLE STATE CONTRACTS

"Hetq" also found that "Noyavan" is not a newcomer to the state procurement market. Between 2018 and 2024, 15 contracts were signed with the company, with a total value of AMD 506 million 134 thousand.

In different years, the company supplied construction materials, furniture, and centralized heating systems to state and municipal institutions, including Yerevan Municipality, the Ministry of Defense, the State Revenue Committee, the State Protection Service, and the Civil Aviation Committee. According to "Hetq," "Noyavan" began participating in state procurement in 2018.

At the same time, according to data from the State Revenue Committee, "Noyavan's" main activity is wholesale trade in construction materials.

However, in the case of the Vedi Municipality, the company received not only orders related to the supply of construction materials, but also large contracts for gasification and the construction of drinking water pipelines.

This is precisely where one of the important questions raised by "Hetq" arises: how did a company engaged in the wholesale trade of construction materials become the contractor for such works?

THE AMD 109 MILLION GASIFICATION CONTRACT

In response to "Hetq's" inquiry, the Vedi Municipality stated that the gasification procurement had been carried out in accordance with the Law on Procurement and the relevant government decision.

According to the municipality's clarification, the works were carried out jointly with "Tiamat" LLC, which holds the relevant license, on the basis of a joint activity agreement.

Thus, the municipality provided a legal justification for entering into the contract. Grigor Manukyan, the owner of "Noyavan," also told "Hetq" that the company does not engage solely in the sale of construction materials and had previously carried out similar works.

However, the main circumstance remains: the owner of this company is the maternal uncle of the head of the community.

FAMILY CONNECTIONS: FROM BUSINESS TO POLITICS

"Hetq's" publication shows that the connection is not limited to the family relationship between Garik Sargsyan and Grigor Manukyan.

Grigor Manukyan's son, Gevorg Manukyan, worked at the Ararat Regional Administration after the 2018 change of government, at a time when Garik Sargsyan held the position of governor of the region. Gevorg Manukyan served as Sargsyan's aide.

Later, he was included as number five on the Civil Contract party's electoral list in the elections for the Council of Elders of Ararat Municipality, and he is now a member of the Civil Contract faction of the Council of Elders.

Thus, the totality of the facts presented by "Hetq" forms a chain of connections in which municipal government, the political team, and the business of a close relative of a public official intersect.

"I DON'T SEE A CONFLICT OF INTEREST"

"Hetq" directly asked Grigor Manukyan whether his family relationship with Garik Sargsyan had helped "Noyavan" win the tenders.

Manukyan responded that if that circumstance had had an influence, then the company would also have won the other tenders in which it participates. He also stated that he does not see a conflict of interest in this situation.

However, the most important question raised by the investigation is precisely this: is the mere fact that the company did not win all the tenders sufficient to close the issue of a possible conflict between the interests of a public official and the business interests of his close relative?

The subsequent developments following "Hetq's" publication show that this issue did not remain merely at the level of journalistic discussion.

"HETQ'S" PUBLICATION AT THE CORRUPTION PREVENTION AND INVESTIGATION BODIES

On December 4, 2024, "Hetq" published a new article, reporting that on November 14, the Prosecutor General's Office had sent its publication to the Anti-Corruption Committee for an operational review.

According to the same publication, within the framework of an inquiry received after "Hetq's" article, the Corruption Prevention Commission had stated that Garik Sargsyan had committed an administrative offense.

According to the clarification from the CPC presented by "Hetq," in cases where an action or decision taken within the scope of a public official's powers may lead to a conflict of interest, the relevant official is required to submit a written declaration concerning those circumstances in accordance with the established procedure. According to "Hetq," Garik Sargsyan did not submit such a declaration to the CPC. At the same time, the commission could not fine him because one year had passed since the contract was signed.

This circumstance significantly changes the logic of the story.

If, at the time of the November 11 publication, the issue was primarily about contracts worth hundreds of millions of drams signed with a company belonging to the mayor's close relative and the questions that arose around them, then by December 4 there was also a response from the competent state bodies.

THE ISSUE IS NOT ONLY THE AMD 389 MILLION

At the center of this story is AMD 389 million, but the issue is not only the size of that amount.

The issue is also that a company 100 percent owned by a close relative of the head of the community received two major contracts from the municipality: one for AMD 109 million and the other for AMD 280 million.

The issue is also that the son of the owner of "Noyavan" had previously worked at the Ararat Regional Administration headed by Garik Sargsyan, as his aide, and later became a member of the Civil Contract faction in the Ararat Council of Elders.

And, finally, the issue is also that only after "Hetq's" publication did the matter come to the attention of anti-corruption bodies, while the Corruption Prevention Commission and other oversight bodies did not take preventive action, as a result of which Garik Sargsyan avoided being held accountable.

Therefore, the Vedi case cannot be reduced to the simplistic question of whether "the tender was legal or not." In the management of public funds, it is equally important to understand whether the possibility of personal and family interests influencing the decision-making process of a public official had been excluded.