Armenia’s Office of the Prosecutor-General said on Friday that it has forwarded a “crime report” submitted by them to another law-enforcement body, the Anti-Corruption Committee (ACC). The ACC said it is looking into the corruption claims.
“We have legitimate suspicions that we are dealing with money laundering or illicit enrichment, not to mention false income declarations shown in this report,” one of the lawyers, Ara Zohrabian, told reporters earlier this week.
“This is a very dubious deal,” he said of the $1 million loan.
Zohrabian and his colleagues made the allegations after scrutinizing Hovannisian’s asset declarations and other financial documents. According to them, the minister used the loan in 2021 to buy a construction materials company which he then sold to one of his relatives. In 2023, the company secured a tax break from the Armenian government to import items worth 1.8 billion drams ($4.5 million).
“There are four companies linked to Vahe Hovannisian,” Zohrabian claimed, adding that the minister has lent money to two of them.
A spokeswoman for the Armenian Finance Ministry, Inga Galustian, rejected the corruption claims as baseless. She said that Hovannisian obtained the loan before joining the ministry in 2021.
A member of Prime Minister Nikol Pashinian’s Civil Contract party, Hovannisian first served as deputy minister and was promoted to his current position two years ago. He previously worked for the Manila-based Asian Development Bank.
Before the lawyers’ allegations, Factor.am reported that Hovannisian failed to declare the interest-free loan to an anti-corruption body scrutinizing the assets of senior Armenian officials. Galustian acknowledged “several typos” in his income declarations. The minister is now correcting them, she said.
The lawyers went after Hovannisian after his ministry drafted a government bill that would abolish a preferential tax regime enjoyed by many small and medium-sized enterprises, including law firms. They have long been exempt from value-added tax (VAT) and profit tax set at 20 percent and 18 percent respectively, paying instead a “simplified tax” equivalent to just 5 percent of their annual turnover. Many lawyers have denounced the bill.