Nairit: Armenia’s chemical giant becomes CIS Interstate Bank’s property

The synthetic rubber producing plant, Nairit, has become the property of the Commonwealth of Independent States’ (CIS) Interstate Bank, Armenia’s Minister of Energy and Natural Resources Armen Movsisyan announced on Thursday.

at Nairit, took a $70-million loan at the CIS Interstate Bank in 2006. That loan, secured by the plant assets, was to serve the purpose of upgrading Nairit production, but the goal was not reached. The term for the repayment of the loan expired at the end of last December and the plant became the property of the bank.

Nairit CJSC, a sprawling chemical plant in a southern Yerevan suburb, is the sole producer of chloroprene rubber in the CIS and is one of the largest enterprises in Armenia. Since its privatization, Nairit has been at the center of lingering suspicions of corrupt dealings resulting in long-term idling, arrears of wages (as well as an explosion that occurred at one of the plant’s facilities in 2009).

Beginning in November 2011, Harutyun Arakelyan, the chairman of the Ramkavar-Azatakan Party of Armenia, has published several “open letters” in which he directly accuses the government and Prime Minister Tigran Sargsyan of the plant’s deliberate bankruptcy and squander of means. He reminds that the prime minister’s brother, Tigran Sargsyan, is one of the deputy directors of the plant.

Last November, Prime Minister Sargsyan turned to the Prosecutor-General’s Office with a request for an inquiry to be conducted into Arakelyan’s allegations and for criminal proceedings to be instituted in their connection. All materials on this case were sent to the police.

However, no reports on the investigation of the case have been received, and Arakelyan insists he has not been summoned for questioning yet. In fact, no concrete answers have been provided to questions raised by a citizen, moreover, his information that the plant will become the bank’s property has been confirmed.

The Ramkavar-Azatakyan party leader claims to have concrete evidence to arrive at such conclusions.

“Mr. Prime Minister, as the holder of the 10-percent government share of the Nairit plant, can you answer why the total monthly salary paid to the 10 deputy general directors at the idling plant, including your brother, makes 35 million drams (about $90,000)?” Arakelyan asks PM Sargsyan in writing.

Arakelyan claims to possess evidence of an outrageous disappearance of $31 million that originated from the sale of Nairit. He also alleges that Tigran Sargsyan, then the director of the Armenian Central Bank and simultaneously chairman of the CIS Interstate Bank’s Board, took an immediate part in the deal with the Bank. (Central Bank governors in CIS-member states take six-month rotations as CIS Interstate Bank board chairs).

“The deliberate process of Nairit bankruptcy, which is owned by the Republic of Armenia, continues today as well,” says Arakelyan.

Meanwhile, Energy and Natural Resources Minister Movsisyan says, a number of reputable companies continue to show interest in Nairit. The Ministry is going to submit a Nairit development program to independent experts for examination, which will make it possible to identify issues with investments. Responding to the question regarding possible personnel cuts at Nairit (which, as of last year, had a 3,000-strong workforce, with nearly two thirds of it on unpaid leaves), Movsisyan said some jobs could be slashed after a new company was selected to manage the struggling plant. At present, Nairit has arrears of wages to its workers for five months.