A Ukrainian-based investment fund holding a sizable stake in Armenia’s leading airline deplored on Wednesday the severe beating of the company’s chief executive and majority shareholder which was reportedly ordered by a feared tycoon close to the Armenian government.
The East Prospect Fund warned that Saturday’s assault on Arsen Avetisian jeopardized its plans to help restart the Air Armenia carrier’s operations with large-scale investments. Its chief executive, Vladimir Bobylev, said the incident raised questions about the safety of doing business in the Armenian aviation sector and damaged Armenia’s reputation among foreign investors.
“The first question a potential investor asks about a country has to do with security,” Bobylev told RFE/RL’s Armenian service (Azatutyun.am) by phone. “People get worried when they hear about such [violent] things.”
“These events could deal a blow to investments in and reforms of the company,” the East Prospect Fund said in a separate written statement issued earlier in the day. “We are therefore asking both the [Armenian] authorities and [involved] parties to find lawful ways of solving the existing problem.”
Avetisian, who owns 51 percent of Air Armenia, was hospitalized with serious injuries following a meeting with Ruben Hayrapetian, a wealthy businessman heading the Football Federation of Armenia (FFA). He claimed afterwards to have been beaten up by Hayrapetian’s bodyguards but declined to specify reasons for the violence for now. Hayrapetian, who has a history of violent conduct, has so far refused to comment on the incident.
Avetisian’s wife, Izabella Melkumian, has linked the incident with Air Armenia’s outstanding debt to Taron-Avia, another airline from which Air Armenia leased an aircraft until suspending its flights late last year. News reports citing her have said that the Taron-Avia owners have “ceded” the debt to Hayrapetian.
The Armenian police and other law-enforcement bodies began investigating the violent attack earlier this week. They have not detained or charged anyone yet.
Hayrapetian has been a staunch backer of President Serzh Sarkisian throughout the latter’s seven-year rule. The tycoon holds sway in Yerevan’s northern Avan district, putting him in a position to earn Sarkisian and the ruling Republican Party of Armenia (HHK) many votes there.
Air Armenia also owes substantial sums to several Armenian banks and aviation service providers. Some of those banks took legal action against the troubled carrier earlier this year.
The airline maintains that it is committed to repaying its debts but needs more time for doing that. The East Prospect Fund, which is registered in the British Virgin Islands but headquartered in Ukraine’s capital Kiev, made similar assurances in its statement.
Just one day before Avetisian’s beating, the fund manager announced that it has invested $68 million in Air Armenia. Bobylev said that this investment will be used for “developing” the Armenian company. He did not specify whether that will include debt repayments.
Air Armenia specialized in cargo shipments by air until Armenia’s flagship airline, Armavia, went bankrupt in April 2013. The bankruptcy led the Armenian government to fully liberalize the domestic aviation sector. Air Armenia took over some of Armavia’s flights later in 2013. But it halted its flights to a dozen destinations in Russia and Europe in October 2014 as a result of a financial dispute with Russia’s national air navigation service.
The East Prospect Fund pledged to breathe a new life into Air Armenia in December 2014 when it bought a 49 percent share in the company in December 2014. Bobylev said at the time that the fund will restructure the company and expand its small fleet of aircraft. This, he said, should allow it to relaunch the suspended flight services by March 2015.
Bobylev claimed on Wednesday that Air Armenia’s renewed commercial operations have since been hampered not only by the lawsuits filed against it but also Armenia’s civil aviation authority and air navigation service. But he would not be drawn on the “obstacles” created by them.
Asked by RFE/RL’s Armenian service (Azatutyun.am) when Air Armenia plans to resume its flights, Bobylev said, “I would have answered your question four days ago, but will refrain from doing that today. I will take a break until the beginning of September.”
The East Prospect Funds describes itself on its website as a fund manager specializing in “problematic assets.” Its investment portfolio, estimated at $2.5 billion, mainly consists of mining operations in Ukraine.