According to the state incomes committee, the largest taxpayer of the first three months of the year is ArmRusGazArd company. During the past years this company has been the main largest taxpayer for years.
The management of the company has always been flattered by this fact. The management of this company always refers to these indicators and large amounts of taxes paid to the budget to show how important their company is. In addition, they also say that the ARG is a serious and wealthy company and its operations and business will not be limited with Armenia only and it will be enlarged to the other countries of the region as well.
It is a fact that the company is wealthy, but there is a problem, which is that they have not published the financial report for 2011 yet. This is not a minor thing and it is very serious because it is also a violation of the provisions of the license issued to the ARG by the committee on regulation of monopolies on September 22, 2003.
According to the license provisions, the company shall publish financial report for the year till May 30in the established manner, as well as publish the report for the previous year in a newspaper. As of yesterday the report had not been published yet. We were told by the media department of the company that they did not know when the report would be published. According to Article 7.1 of the license agreement, the committee on regulating public services can apply penalties in such situations such as warning, decreasing the fares, suspending the license and cancelling the license.
Time will show which of these penalties may be applied by the institution headed by Robert Nazaryan and whether anything will be done in general.
However, the problem is not the penalty. It is interesting to know the reason why the company is being late to publish the report. They say that their company is serious, thus they should have it ready in time. Probably the report is ready but they do not want to publish it yet. If it is the case, it means that they want to hide something. To find an answer to this question, we will try to look into the timeline of processes that happening to the ARG. A couple of months ago we published about the ARG and situation around the gas price. We mentioned in that article that even though the authorities were announcing that the ARG was paying 180 dollars per thousand cubic meters of gas, in the reality starting from the middle of the previous year the price for gas had been 210-220 dollars. Such information had been published by other newspapers as well by referring to their sources of information. This was shown on the information published by the customs service as well (https://archive.168.am/am/articles/31770).
We also wrote that the reason the information was being kept in secret was the fact that the ARG would not be able to explain why their management had failed to apply to the committee on regulation of public services to revise the prices. In other words, they would not be able to explain why and how they were working with loss. It is a fact that the ARG is working with loss. According to the ARG’s report 2010, which is published in the company’s web site, the ARG closed the year with more than 11 bln drams loss. In consideration of the fact that in 2011 the company was buying gas with higher prices and selling for the same price, it means that the company’s losses were more during that year. Accordingly, this information had to be published in the ARG’s report for 2011, which is still confidential and is not open to public.
In fact the company is refraining not from the information on the losses, but the assumptions stemming out of that. For example, if it turns out that the price of gas has been increased, it will be very difficult for the government and that company to prove that the prices for other products in the domestic market will not grow and those were kept down because of the elections were coming up.
Now let’s discuss the intrigues around this company. Rumors say that the Russian party does not like the way the company is managed and wants to take the management under total control. The Russian party wants to buy the remaining 20% of the share that is currently owned by the Armenian party. Such information has been published by a Russian newspaper too.
Many people do not believe the “reliable sources” of newspapers, but there could be logical explanations for this. For example, the answer could be the excellent results of the elections as this could be agreed with the Russian government in advance. In other words, increased prices of gas could affect the results of elections. In other words, the government could worsen the social and economic situation or do wrong to the economy and it is OK, but only to have good results after the elections. There are no doubts that the same will happen during the presidential elections as well.
In other words, the Russians cannot work with losses anymore, thus the prices will be increased. In such situations usually there are two ways out – they obligate the management to do what they want or they take the management under their total control. We will see which of these options will be applicable in the ARG, but it is for sure that there will be changes in this company soon.