The State Revenue Committee (SRC) is continuing a tax evasion investigation into Armenia’s largest food exporting company despite releasing its chief executive from prison about three months ago, the SRC chief, Davit Ananian, said on Thursday
Ananian stressed at the same time that his agency comprising the Armenian tax and customs services does not want to disrupt the Spayka company’s operations given their significance for the domestic agricultural sector.
Spayka’s official owner and executive director, Davit Ghazarian, was arrested in early April after the SRC accused the company of evading over 7 billion drams ($14.5 million) in taxes in 2015 and 2016.
The accusations stem from large quantities of foodstuffs which were imported to Armenia by another company, Greenproduct. The SRC says that Greenproduct is controlled by Spayka and that the latter rigged its customs documents to pay fewer taxes from those imports.
Ghazarian strongly denied the charges and any ownership links to Greenproduct. The businessman was set free in early May after paying the government 1 billion drams.
Armenia -- Davit Ananian, head of the State Revenue Committee, speaks to journalists in Yerevan, July 25, 2019.
Ananian said that the SRC not only stands by its tax fraud claims but also believes that Spayka owes the state more back taxes than were alleged by it in April. He declined to specify the revised sum.
“We are now working to obtain additional facts and make [further] calculations,” the SRC chief told reporters. “At this stage we have left the company and the company’s executive a bit alone so that they deal with the company’s normal work.”
“But this doesn’t mean that we have backed away,” he said. “On the contrary, the initially stated figure of 7-8 billion drams has increased.”
Spayka is Armenia’s leading producer and exporter of agricultural products grown at its own greenhouses or purchased from farmers in about 80 communities across the country. The company employing about 2,000 people also owns about 300 heavy trucks transporting those fruits and vegetables abroad and Russia in particular.
Armenia - Businessman Davit Ghazarian (C) shows Prime Minister Nikol Pashinian around a newly built dairy factory of his Spayka company, Yerevan, March 26, 2019.
In a series of statements released in April, Spayka warned that it may not be able to buy large quantities of agricultural produce from Armenian farmers this year. It said that because of Ghazarian’s arrest its mainly foreign creditors are withholding further funding for the company.
Prime Minister Nikol Pashinian dismissed those warnings on April 9. He said he is confident that the food giant will carry on with the wholesale purchases.
Ghazarian was arrested on April 8 two weeks after inaugurating a state-of-the-art cheese factory in Yerevan at a ceremony attended by Pashinian. Spayka planned to build another cheese plant and expand its greenhouses under a $100 million project that was due to be mostly financed by the Kazakhstan-based Eurasian Development Bank (EDB).
Andrey Belyaninov, the EDB chairman, said on April 25 that the disbursement of its $67 million loan to Spayka has been put on hold due to Ghazarian’s arrest. “We can’t take such a risk if we are talking about [Spayka’s] potential bankruptcy,” Belyaninov was reported to say.