Armenian President Armen Sarkissian held the position of director of the French VH Estate company for nine years, even after being elected president in March 2018.

In 2010, for 7,510,000 euros, the company bought two units of real estate in one of the richest districts of Paris, in the 8th arrondissement, near the Champs-Élysées.

In 2010 Armen Sarkissian’s sister, Dr. Karine Sarkissian, and her daughter, Tatevik Sarkissian, founded a company called VH Estate in Paris. This is a "société civile", which means that it does not operate commercially. In France, "société civile immobilière" companies are usually used to own and manage real estate. The Sarkissians’ VH Estate is engaged in the acquisition and management, servicing and leasing of real estate in France and abroad. ("société civile" type companies are allowed to lease property and receive income).

At the time of its founding, 99% of the company, with a charter capital of 1,000 euros was registered in the name of Karine Sarkissian, and 1% in the name of Tatevik. The non-participating director of the company (gérant non associé) in 2010-2019, according to the documents, was Armen Sarkissian, who assumed the post of President of the Republic of Armenia in April 2018. A. Sargsyan has two sons, Vardan and Hayk, whose initials, as we see, coincide with the name of the company.

Vardan and Hayk Sarkissian

VH Estate used a large loan to purchase property in Paris

VH Estate bought two units of real estate in Paris in the summer of 2010. The company bought the property from a person called Lucas for a total of 7,510,000 euros in the 8th arrondissement of the French capital. The Sarkissians’ property is 500 meters from the Arc de Triomphe. (#2 Av. Hoche).

As part of the deal, VH Estate took two loans in the amount of 7,510,000 and 240,000 euros from the Monaco branch of SG Private Banking, a subsidiary of the French bank Société Générale, mortgaging the entire property. The loans were interest-free, and their repayment deadline was June 2018. However, in addition to the loans, VH Estate had to pay a 20% insurance premium on each loan for the pledged property, i.e., € 1,502,000 and € 48,000.

In the fall of 2017, a subrogation took place. Instead of SG Private Banking (Monaco), the Monaco branch of the Swiss bank Union Bancaire Privée (UBP) was formed as a creditor of a total of 7,750,000 euros. The deadline for fulfilling the loan obligation for the Sarkissians’ company is 2023. October. The loan interest rate was set at 1.3% and the pledged property insurance payment at 10% - 775,000 euros.

Karine Sarkissian

In addition to the pledged 2 units of property, in December 2017, Karineh Sarkissian pledged her 99% stake in VH Estate in favor of UBP as a guarantee to repay a total loan of € 7,750,000.

Hetq asked President Sarkissian if the "VH" in the company name represent the initials of his sons Vardan and Hayk. We also asked what funds the company is using to repay the 7.75-million-euro loan and who is using the Paris real estate. Are Armen Sarkissian and his family members using the property or is it leased to others?

President Sarkissian’s office responded that the questions refer to information containing personal data that are not subject to publication under the Freedom of Information Law.

Armen Sarkissian never declared being the director of VH Estate

Armen Sarkissian served as Armenia’s Ambassador to the United Kingdom from 2013 to 2018. According to Armenia’s Law on Diplomatic Service, a diplomat cannot perform any paid employment other than scientific, educational and creative work. If we are to take Sarkissian at his word, he did not do such work, and did not receive money from VH Estate.

While serving as ambassador, Sarkissian did not declare any income, i.e., he did not receive a salary from anywhere, including the embassy. However, in 2013, when he was appointed Ambassador to the UK for the third time (first time in 1991-1996, second time: 1998-2000), he disclosed 8 million euros. In January 2018, three months before becoming president, that amount dropped to 5.5 million euros. Hetq, in 2018, wrote that the former ambassador and now current president was a wealthy businessman.

After assuming the presidency, Sarkissian declared his president's salary and interest on deposits in two banks as income. That is, he disclosed no income from VH Estate.

Part 4 of Article 124 of Armenia’s Constitution stipulates: "The President of the Republic may not hold any other position, engage in entrepreneurial activity, perform any other paid work."

In response to our inquiry, the President's Office stated that VH Estate was not and is not engaged in business activities and Armen Sarkissian was never paid as the director of VH Estate.

But even if during his time as ambassador and president Armen Sarkissian did not do paid work for VH Estate and was not paid, it is a fact that in 2010-2019 he held the position of company director.

The President's Office informed us that this is not a violation of the Constitution. "The legal restriction provided for in Part 4 of Article 124 of the Constitution refers exclusively to work carried out on a paid basis. This means that according to the Constitution, the President of the Republic can have different statuses in different organizations on a voluntary basis.” In other words, according to the President's Office, it is not a violation of the Constitution for the President to work as an unpaid director in any organization.

Former Armenian Minister of Justice Gevorg Danielyan (Doctor of Law, Professor) commenting on the above-mentioned constitutional restriction on the president, notes:

"It should be emphasized that the term 'position' in this case has not a general, but a specific content. It refers exclusively to any position in the system of public power. For example, the President of the Republic may not be elected or appointed to any body endowed with public authority, even performing advisory functions. The fact that the term 'position' cannot refer to non-governmental organizations, including companies, is also substantiated by the fact that according to Article 124, Part 4 of the Constitution, doing business as well as doing other paid work is envisaged as a rule of general conduct. That is, it does not matter what status the business is carried out in the way of holding any position or without any local administrative powers.”

Thus, according to Danielyan, Armen Sarkissian has not violated Armenia’s Constitution.

However, President Sarkissian did not declare his position as director of VH Estate, which he was obliged to do. Starting in 2019, those filing income statements must also file a declaration of interests that asks if the person holds any administrative/supervisory position in commercial or non-commercial organizations.

As this requirement is valid from 2019, and Sarkissian according to VH Estate documents was the director until February 2019, he was required to submit an annual declaration for 2019 stating he had been a director of a French company during the year. He failed to do so. (See below)

Instead, Armen Sarkissian, in his 2019 and 2020 income declarations, only mentions that he is the Chairman of the Board of Trustees of the Hayastan All-Armenian Fund (ex officio), the Yerevan My Love Foundation, as well as a member of the Board of Trustees of the Armenian General Benevolent Union (AGBU) and the Manoukian Charitable Foundation. According to Armenia’s “Law on Foundations”, the chairman, co-chairs and other members of the Board of Trustees of the Foundation are not considered to be persons holding positions in the Foundation and perform their duties without remuneration on a voluntary basis. Thus, there is no constitutional violation here as well.

Armenia’s Criminal Code imposes a penalty when the person responsible for submitting a declaration presents false information in the declaration or hides the data subject to declaration. The punishment can be a fine of 2-3 million drams or imprisonment for a maximum of two years, in which case a person can be deprived of the right to hold certain positions or engage in certain activities for a maximum of three years.

Decision to change director appeared in French register following a Hetq inquiry

Hetq sent a written inquiry to Sarkissian’s office on July 26 this year. At that time, according to the French Registry, it was Armen Sarkissian who was the director of VH Estate. We received an answer on July 30. The Public Relations Department of the President's Office wrote the following.

“The president is currently not the director of VH Estate, although it is possible that old data is stored in electronic databases."

However, the information we had wasn’t from any database, but official documents from the register of the Paris Commercial Court (Greffe du Tribunal de Commerce de Paris), including the company's charter and statements about its management.

After our inquiry and the response from Sarkissian’s office, something odd happened.

On August 12, a new document, dated February 6, 2019, appeared in the French register stating that the powers of the VH Estate director passed from Armen Sarkissian to his younger son Hayk in 2019.

It’s strange that while the company’s previous documents were officially registered within a maximum of one month, the decision to change the director appeared in the register 2.5 years later, after our inquiry. The transfer decision was signed by Karine and Tatevik Sarkissian, and Hayk Sarkissian signed his consent to become director.

Hayk Sargsyan, a citizen of Armenia and Great Britain, who is registered in Yerevan together with his father, is presented in the above-mentioned document as a resident of London. (Info about the Sarkissians’ London house is here).

President Sarkissian’s son became a VH Estate shareholder

On September 3 (again after a Hetq inquiry), two new VH Estate documents appeared in the French Register. Both are dated May 6 this year but were actually submitted to the registry in the fall (see below).

The first one in the documents refers to the change of shareholders. Accordingly, in May 2021, Tatevik Sarkissian handed over her 1% to Hayk Sarkissian, who became the owner of VH Estate together with his aunt. In the transfer document, Tatevik is mentioned as a resident of London, and Hayk is mentioned at the address in Paris (#2 v. Hoche), where property was purchased through VH Estate. The second is the updated charter of the company. Hayk Sarkissian is both a co-owner and a director.

One criminal case involving Armen Sarkissian is already under investigation

Not declaring the post of director is not the only legal issue for the President of Armenia.

There is a criminal case under investigation by Armenia’s Special Investigation Service (the Anti-Corruption Committee has already been formed instead of this structure), the focus of which is the issue of the president's citizenship.

According to Armenia’s Constitution, "Anyone who has reached the age of 40, who has been a citizen of the Republic of Armenia for the last six years, permanently resides in the Republic of Armenia for the last six years, has the right to vote and speaks Armenian, can be elected President of the Republic."

In February 2018, prior to his election as president, Hetq wrote that, according to the British Register, the Armenian presidential candidate was a British citizen as far back as 2014, and not the claimed six years. This fact should have precluded his candidacy for president.

However, Sarkissian’s office told Hetq at the time that Sarkissian was a dual citizen of Armenia and the United Kingdom from 2002-2011 and later renounced his British citizenship.

In March of this year, 53 Armenian lawyers filed a criminal complaint with Armenia’s Prosecutor General’s Office (PGO) alleging that before being elected president, Armen Sarkissian concealed the fact of dual citizenship that prevented him from being elected president. The lawyers argue that Sarkissian did not meet the constitutional requirement of being a citizen of the Republic of Armenia for at least six years. Based on the lawyers' report, the Special Investigation Service (SIS) prepared a case file but then rejected the initiation of a criminal case. The lawyers then filed a complaint with the PGO.

The PGO informed Hetq that the materials prepared by the SIS contained elements of forgery. Thus, on April 27, the PGO overturned the SIS decision and filed a criminal case, which was sent to the SIS for investigation.

Hetq also asked whether President Armen Sarkissian had been interrogated during the preliminary investigation and in what capacity, to which the PGO replied that it was a pre-investigation secret and not subject to publication.

(Atanas Tchobanov/bird.bg assisted in preparing this article)