Prime Minister Nikol Pashinian pledged to “quickly” nationalize Electric Networks of Armenia (ENA) on June 18 hours after Karapetian was arrested in Yerevan following his strong criticism of Pashinian’s campaign against the Armenian Apostolic Church. He accused the company of creating a “near energy crisis” in Armenia with the possible aim of increasing public discontent with his government.
Armenian opposition leaders and other government critics countered that Pashinian is simply keen to punish Karapetian. They warned that ENA’s nationalization would be illegal and deal a serious blow to Armenia’s business reputation.
The Armenian parliament controlled by the ruling Civil Contract party hastily approved on July 2 a government bill allowing the government to “temporarily” take over ENA’s management before forcing the company’s owner to sell it within three months. The Public Services Regulatory Commission (PSRC), the energy regulator headed by a political ally of Pashinian, was authorized to approve such action.
The government formally requested it on Tuesday, accusing ENA of mismanaging the electricity distribution network and blaming it for periodical power cuts occurring in various parts of the country. In line with the controversial law, the PSRC chairman, Mesrop Mesropian, promptly approved the government’s choice of the “interim manager” of ENA pending the commission’s consideration of the government allegations.
Mesropian announced his decision in a 28-page statement. Grammatical and spelling errors in the text suggest that it was written in haste.
The newly appointed ENA manager, Romanos Petrosian, is a senior member of Pashinian’s Civil Contract party who headed the State Oversight Service until Thursday. Petrosian has never worked in the energy sector before. ENA’s current chief executive, Davit Ghazinian, said this fact alone shows that the ongoing government takeover of the company is politically motivated.
“The people involved in this process will sooner or later be held accountable,” Ghazianian told a news conference. “Serious legal proceedings will be initiated for their criminal acts.”
Karapetian and his family warned on June 30 that they will file an international lawsuit against the government if it does “expropriate” ENA. They said they would seek “full compensation” for the loss of the tycoon’s biggest asset in Armenia.
Ghazinian made clear that despite considering the government takeover of their company illegal, he and other top ENA do not intend to resign.
“On behalf of the majority of our management, I am authorized to announce that we are staying here to work for the good of our people, to protect the interests of the company first and foremost so that it operates in a proper, normal way,” he said.
Karapetian’s Moscow-based Tashir Group claims to have invested at least $700 million in ENA and sharply cut its losses since buying the utility from Russia’s RAO UES energy giant in 2015. That acquisition followed street protests in Yerevan against a UES attempt to raise electricity prices in Armenia. Tashir has kept the prices unchanged.
ENA is the largest of Tashir’s companies in Armenia. The bulk of Karapetian’s business assets, estimated by the Forbes magazine at $4 billion, are located in Russia where the 59-year-old tycoon has lived since the early 1990s.
Karapetian was initially prosecuted for allegedly calling for a violent overthrow of Pashinian’s government. He was also charged with tax evasion, fraud and money laundering after pledging to fight for regime change in Armenia and set up a new opposition group for that purpose. He denies all the accusations levelled against him.