"Zhoghovurd": The deputy mayor, purchases from one person and corruption in the form of a conflict of interest

The “Zhoghovurd” daily writes: “It is accepted to say that when organizing events, especially state or community ones, huge sums of money are spent, which are mostly not even controlled. The “Zhoghovurd” daily investigated the activities of the most famous company and recorded a corruption phenomenon of alleged conflict of interest.

It turns out that a company organizing large state ceremonial events does not appear quite by chance, for example, in the Government of the Republic of Armenia, the Ministry of Foreign Affairs or the Yerevan Municipality.

“Factory Production” LLC is one of the few “major players” that have won state tenders or organized events mostly through purchases from one person.

According to the State Register of Legal Entities, “Factory Production” LLC was founded on June 29, 2017. The company was founded by Rudik Ter-Galstyan and Vazgen Poghosyan, who each had a 50 percent stake until November 26, 2021, but since then, 100 percent of the company's shares belong to Rudik Ter-Galstyan, who also holds the position of director of the company.

Rudik Ter-Galstyan and Vazgen Poghosyan are friends. Ter-Galstyan was the chief producer of the Public Television Company from 2012 to 2017, and Vazgen Poghosyan was the executive producer of the Public Television.

On December 2, 2021, during Armen Sargsyan's term in office, Vazgen Poghosyan was appointed assistant to the president of the republic. On January 23, 2022, Armen Sargsyan resigned, and Vahagn Khachaturyan, who assumed the post of president on March 3, dismissed Vazgen Poghosyan from the position of assistant, effective March 18.

“Hetq” wrote that in total, “Factory Production” LLC signed 14 contracts with various state bodies between 2018 and 2022, 12 of which were without a tender. The total value of the contracts was about 1.5 billion drams.

The “Zhoghovurd” daily newspaper found out that “Factory Production” LLC signed contracts worth almost 780 million drams with the Yerevan Municipality alone in 2025, and with the staff of the Syunik regional governor of the Republic of Armenia - 122 million 735 thousand drams, all through the method of procurement from one person, without a tender.

This is, of course, a tradition in the Yerevan Municipality.

Meanwhile, according to Article 23, Part 1, Clause 4 of the RA Law “On Procurement”, the procurement can be made from one person if the purchase price does not exceed the base unit of procurement, which is 1 million drams.

According to the “Zhoghovurd” daily newspaper, the person “supporting” and “supporting” this company from within the Municipality is the Deputy Head of the Kentron Administrative District, Artur Julhakyan.

As part of the investigation, Emma Mikaelyan, a journalist for the “Zhoghovurd” daily newspaper, under the pretext of organizing events, without presenting herself as a journalist, called Artur Julhakyan, who did not deny his participation in the events organized by “Factory Production” LLC.

“Yes, you are right to call about the events, we are engaged in that, our firm is engaged in that. Tell me how we can help,” she said, suggesting to contact a certain Marianna, perhaps having an appointment with Marianna Aslanyan.

During the second call, Julhakyan mentioned that “at that time he worked” and outsourced it. This means that the company had handed over some of its work to Julhakyan, and not done it internally.

Interestingly, in his biography, which is published on the official website of the Yerevan Municipality, Artur Julhakyan did not mention a single line about his work at “Factory Production” LLC. However, he noted that he managed a number of events in 2018-2024. Prior to that, from 2012 to 2018, Julhakyan, according to his biography, did not do anything after studying.

Let us inform you that the deputy mayor of Kentron was appointed on May 8, 2024 and submitted a declaration on assuming official duties. According to that declaration, the latter received “other income” in the amount of 12 million 328 thousand drams from “several organizations”, while those several organizations, according to the law, had to be filled out piece by piece.During the conversation, the journalist of the “Zhoghovurd” daily newspaper found out that Artur Julhakyan, although he is now legally unrelated to the company, nevertheless continues to deal with their affairs and support them in matters related to certain events.

Varuzhan Hoktanyan, the head of programs at the “Transparency International” anti-corruption center, said in an interview with the “Zhoghovurd” daily that on January 26, the Ministry of Finance submitted a draft to the National Assembly on amendments to the Law “On Procurement” and at that time it would already be a conflict of interest and naturally a subject of investigation by the Corruption Prevention Committee, but under the current legislation, unfortunately, this is not the case.

“I am sure that this company will not in any way show that the deputy mayor is related to them. He was simply careless enough in his words, thinking that he really had something to do with some company. Naturally, the corruption risk is very high here, because in that case the deputy mayor is somehow connected,” explained Hoktanyan.

Thus, the deputy mayor, who works under Yerevan Mayor Tigran Avinyan, is operating in the realm of an alleged conflict of interest. He both works as a deputy mayor and advances the affairs of “Factory”, hiding the real data in the declaration.

Nikol Pashinyan would have said 8 years ago, “state oligarchs who plunder the budget”, now he is actually patronizing them with his silence.

Let us inform you that Vazgen Poghosyan, a shareholder of “Factory Production” LLC, later became the director of “Background Production” LLC. 81 percent of the shares of this company belong to Marine Stepanyan, 19 percent to Vazgen Poghosyan.

Marine Stepanyan is Vazgen Poghosyan’s wife.

This is the second favorite company of the authorities.

Of course, Background Production is not a new company involved in procurement. It was founded in May 2018 by the son of the beloved actor Hrant Tokhatyan, Hrant Tokhatyan. Four years later, in May 2022, Marine Stepanyan and Vazgen Poghosyan acquired shares in the company.

And after the change in shares, Background Production began to actively participate in state procurements and sign large contracts with various state departments.

Among the large transactions between Background Production and state departments, one can also single out the organization of the 2023 European Weightlifting Championship, for which the Ministry of Education, Science, Culture and Sports allocated 1 billion 160 million drams to Background Production LLC.

As well as the EBRD annual meeting, for the organization of which 1.8 billion drams have been allocated from the RA state budget.

Interestingly, in the case of both companies, starting from 2018-2019, the procurement process has been carried out by purchasing from a single person, without a competitive process, which seems to have escaped the attention of Gegham Gevorgyan, Chairman of the Competition and Consumer Protection Committee, Tigran Avinyan’s friend, as well as Mariam Galstyan, Chairman of the Corruption Prevention Committee.