Yerevan Municipality Appropriated “Multi Wellness” Property

According to a publication by Pastinfo, Yerevan Municipality has changed its official position regarding the property of the “Multi Wellness” sports and wellness center owned by Gagik Tsarukyan. While in July the municipality confirmed that the gym’s movable property had been entrusted to it for safekeeping and was not community property, it now claims that the gym belongs to the municipality.

Developments surrounding “Multi Wellness” began on July 6, following searches conducted at Gagik Tsarukyan’s home and at companies belonging to him. The gym ceased operations, while the Yerevan Municipality had already notified the company that it was unilaterally terminating the contract. Shortly afterward, the gym’s doors were sealed, and later the “Yerevan Wellness” center opened in the same premises under the management of the municipality.

In response to a Pastinfo inquiry on July 28, the municipality officially stated that the movable property of the buildings and structures located at 22 Khanjyan Street was not community property but had been entrusted to the municipality for safekeeping. At the same time, it clarified that the community was the owner of the immovable property at the address, but that neither the shares nor the management powers of “Multi Wellness” had been transferred to it. Therefore, the community could not assume the company’s rights and obligations or make decisions regarding its management.

On August 11, the Investigative Committee also confirmed that, by a decision adopted on July 16, the immovable property located at 22 Khanjyan Street had been recognized as material evidence and handed over for responsible safekeeping to an employee of the relevant Yerevan Municipality service.

However, on August 28, Pastinfo asked the municipality to clarify on what legal basis the community had provided the property entrusted to it for safekeeping for use by another company. After nearly a month of examination, the municipality provided a new response, claiming that the gym was its property and that the property had not been entrusted to the municipality for safekeeping.

Thus, the municipality is now denying its own official response from July, while the Investigative Committee’s clarification continues to indicate that the property was handed over for responsible safekeeping. However, the municipality has not presented any document substantiating its ownership rights over the movable property.

It is also problematic that the gym continues to operate despite the urban-planning violations cited by the municipality not having been eliminated.

In its response to Pastinfo on July 23, the municipality stated that the buildings and structures located at 11 Alek Manukyan Street had been constructed with deviations from the approved urban-planning documents. In addition, the company had approximately AMD 16 million in outstanding obligations to the community. The municipality presented these circumstances as grounds for unilaterally terminating the contract for the development right over a 1.262154-hectare plot of land.

The municipality now acknowledges that the design deviations have still not been eliminated and that work is underway to address them. At the same time, it claims that following the termination of the contract, the community is not obligated to pay itself the amounts stipulated for the development right or to fulfill other obligations arising from the previous contract.

In effect, the violations previously cited as grounds for terminating the contract remain in place, yet they do not prevent the gym from operating on the same premises, now under the municipality’s control. The municipality has also failed to indicate how many other companies’ contracts it has terminated because of similar violations, stating that such cases are not separately recorded.

Separate questions arise regarding the gym’s financial operations. Asked by Pastinfo how the salaries of “Yerevan Wellness” employees are generated and what payments are made to the community budget, the municipality responded: “The Yerevan community has no obligation to pay itself rent or other payments, while employees’ salaries are generated as a result of the gym’s operations.”

In other words, the gym generates revenue from which employees’ salaries are paid, but the municipality has not clarified how this revenue is recorded, who manages the proceeds, or under what legal status the community is carrying out this activity.

It is also noteworthy that, according to the Pastinfo publication, the manager of “Yerevan Wellness” is the personal trainer of Vahagn Aleksanyan, deputy head of the Civil Contract faction in the National Assembly. Aleksanyan previously trained at the “Multi Wellness” center itself.

The situation requires a legal assessment by the Prosecutor’s Office, the Anti-Corruption Committee, and the Investigative Committee. It must be established on what grounds the municipality is managing property entrusted to it for safekeeping within the framework of criminal proceedings, why it has handed it over for use by another company, how the gym’s revenues are being managed, and whether the actions of community officials contain elements of abuse of official powers or other crimes.