TYCOONS RELOADED: WHO CONTROLS WHAT IN ARMENIA

UNCLAS SECTION 01 OF 03 YEREVAN 002975

SIPDIS

SENSITIVE

DEPT FOR EUR/CACEN ESIDEREAS

E.O. 12958: N/A
TAGS: PREL PGOV ARMENIA'>AM
SUBJECT: TYCOONS RELOADED: WHO CONTROLS WHAT IN ARMENIA



1. (U) Sensitive But Unclassified. Not for Internet
Distribution.


2. (SBU) The following is our informal guide to who owns
what in ARMENIA, with the caveat that some of the
information is based on rumor and speculation.

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MULTI GROUP
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3. (SBU) The Multi Group is headed by Gagik Tsaroukian (Dodi
Gago),MP elected in 2003. A former sportsman (arm
wrestling),Tsaroukian is believed to have close ties with
the Kocharian family, especially the late Valeriy Kocharian,
the President's brother. Multi Group is a holding company
consisting of a number of major enterprises in different
industries:

--Kotayk Brewery: a joint venture with Castel Beer
--Manana Grain: one of ARMENIA's major wheat importers
--Aviaservice: the GOAM sold the right to service aircrafts
(catering, etc.) in November 2003. According to Embassy
sources, the President's late brother Valeriy Kocharian's
family has a stake in this business
--ARMENIAn International Airways (AIA): Tsaroukian is
believed to have already cashed out
--Ararat winery
--Multi Group Dairy: his mother is in charge of this branch
of the business
--Multi Stone: travertine export to Europe. The plant is
equipped with modern state of the art Italian stone cutting
machines.
--Casino Club Cleopatra, along with a new casino (Pyramid)
under construction
--Gyumri Textile plant: silent co-owner
--Farm projects: including most of the vegetables sold to
the ARMENIAn Military forces
--Furniture Salon network: the largest importer of European
furniture in the country
--Gas stations and natural gas stations: Multi Leon chain
--Two major retail markets: GUM and MASHTOTS AVE

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SIL GROUP
--------------


4. (SBU) The SIL Group is run by Khachatur Sukiassian
(Grzo),MP elected in 1999 and again in 2003. Sukiassian is
the oldest son of Grzo-the-father, and has taken control of
the SIL Group. He is related by marriage to Vano
Siradeghian, the notoriously corrupt and powerful former
Minister of Internal Affairs (currently in hiding outside
ARMENIA). It is widely believed that the Siradeghian is one
of the major shareholders of SIL Group. He is the only
businessman who both maintains and admits his ties with ANM
and is still a successful businessman. SIL Group is one of
the oldest conglomerates, engaged in many industries,
particularly:

--Restaurant chains Pizza di Roma, Queen burger, Chalet
--SIL Hotel and SIL Plaza department store
--Official distributor of Phillip Morris
--Real Estate in downtown Yerevan
--Golden Wood International: hardwood lumber, flooring
strip and finger-joint panel manufacturer
--Yerevan Furniture Plant panel manufacturer
--Armeconombank: a leading commercial bank
--Bjni mineral water plant
--Yerevan Polyplast OJSC: manufacturer of various plastic
household items, pipes, sanitation piping units,
polyethylene film and bags, linoleum and artificial leather
--Zovq Factory OJSC: Zovq natural juices factory
--Construction business (wood and panel)
--Star Valley Co. (Dubai): SIL Group's representative in
UAE
--Masis Gofrotara: cardboard and napkin production
--Sevan Grain Milling Company.

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MIKA LTD
--------------


5. (SBU) MIKA Ltd. is managed by Mikhael Bagdasarov, who is
believed to have earned his primary capital in Russia.
Bagdasarov is the classmate, best friend and business
partner to Defense Minister Serzh Sargsyan. His businesses
include:

--ArmSavings Bank, privatized in 2001
--Viktoria Trade: a major wheat importer
--Mika Trading: oil products imports and distribution
(including 40 percent of gasoline imports)
--Armavia: chartered flights to major Russian cities
--Hrazdan Cement Plant, renamed to Mika Cement
--Gas station chains (called MIKA)
--Mineral water bottling in Dilijan (Dilijan Frolova)
--Other major businesses in Russia and Europe

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GRAND GROUP
--------------


6. (SBU) The GRAND Group is run by Hrant Vardanian, a
businessman with Russian capital and under the President's
protection. Although he is not an MP, his son, Mikhael
Vardanian was elected as MP (2003) on the Dashnak party
proportional list. Vardanian enjoys strong popularity
within the general public as a successful industrialist and
director who reopened several major Soviet-era plants. His
businesses include:

--Grand Candy: major ARMENIAn producer of chocolates,
sweets, ice creams, etc.
--Grand Tobacco: partner with Ruben Hairapetian (Nemets
Rubo) and International Masis Tabak (there has been some
conflict between the two major cigarette producers)
--Grand Sun: production of bulbs and lamps on the basis of
the privatized Lamp factory. Built a similar factory in
Iran.
--Alcohol production
--Several Company stores and cafe chains

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HAYRAPETIAN FAMILY
--------------


7. (SBU) The Hayrapetian family owns the "Hayrapetian
Brothers" Company. Close to the President's office,
especially to advisor Alexan Harutiunian. The younger
brother died in a car accident earlier this year. Current
business activities:

--"Hayastan" Department store
--Hotel Ararat
--BMW dealer
--Erebuni Textile production plant
--Hotel on Lake Sevan shore
--Other additional minor businesses

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RUBEN HAYRAPETIAN
--------------


8. (SBU) Ruben Hayrapetian, a.k.a. Nemets (German) Rubo.
Hayrapetian is the current Chairman of the ARMENIAn Football
Federation. MP (elected in 2003),former Prefect of Avan
Community. Hayrapetian appears to be supported by the
President's office. Current business activities:

--Co-owner of Grand Tobacco
--Aragats textile production plant
--Harsnaqar hotel on Sevan shore
--Several gas stations
--Other additional minor businesses

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HARUTIUN PAMBUKIAN
--------------


9. (SBU) Harutiun Pambukian is an MP elected in 1999 and

2003. He defeated Rubo the Flower (Ruben Gevorgian) in the
race in Davidashen district. Pambukian is a relatively
recent oligarch and major financial supporter of the
Presidential campaign in 2003. Believed to have support of
Russian capital. Major known business activities:

--Max Group: farms, gas stations
--Lusakert Poultry Plant
--Yeghvard Animal Feed Plant
--Stakeholder in Midland Resources: owner of electricity
distribution networks

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SAMVEL ALEKSANIAN
--------------


10. (SBU) Samvel Aleksanian is also known as "Lfik Samo."
Elected Member of Parliament in 2003. A semi-criminal
oligarch, Aleksanian maintains an army of bodyguards. He
boasts little formal education (maybe the least among
oligarchs). Close to the President's office. Tries to
resemble Dodi Gago in everything: his house has the same
architecture, he drives the same make of cars, etc. He has
the following legal businesses:

--Lusastgh (Shining Star): produces vodka and vegetable
oil, owns supermarkets
--Informal "Feudal Lord" of Malatia (a district in Yerevan)
--Major importer of wheat, sugar and butter. Anti-monopoly
Committee recently looked into his case, and admitted that
there is a monopoly in sugar and butter importation. Due to
his very close ties with the Customs Committee, he is able
to import products with best possible privileges, thus
minimizing competition in the market for his company
--Natali Pharm: imports and distributes drugs
--Other additional minor businesses
ORDWAY