American businessman and philanthropist Jon Huntsman, Sr, has aided Armenia in various ways since the earthquake of 1988. Among many other charitable contributions, he built a high school in Gyumri and an entire residential district as well. Mr. Huntsman also invested in Armenia’s economy. According to government figures, Huntsman’s total contributions to Armenia amount to around $20 million.
In 2010, Huntsman decided to liquidate operations in several countries, including Armenia, where Huntsman Building Products (HBP) had been functioning since 1991. It was Mr. Huntsman’s expressed wish that the proceeds from the sale of his assets be allocated to the Civilitas Foundation through its founder, Vartan Oskanian.
The representative of Huntsman International arrived in Armenia to oversee the process in June. A potential buyer was eventually found through Civilitas Board member Tigran Karapetyan. He was Samvel Beglaryan, owner of Shen Concern, a Yerevan-based building products company.
The potential buyer, prior to concluding the transaction, conducted due diligence, studied the HBP’s assets and liabilities, while simultaneously the Armenian Tax Authority reviewed the accounting records of Huntsman Building Materials to ascertain whether there were outstanding tax liabilities. He also applied to the Commission for Economic Competition to receive permission for the transaction.
The Huntsman representative, who had come to Armenia specifically for this purpose, was not prepared for a lengthy stay. Therefore, he transferred all the shares of HBP to Tigran Karapetyan for a nominal price of 1000 AMD. Thus Tigran Karapetyan, as a trusted middle man, was to wait for the determinations of the various agencies and the resolution of any other outstanding issues, and, per the agreement signed with the Huntsman representative, would then sell the shares to the buyer and transfer the proceeds as instructed by Huntsman. The attorneys and accountants and tax specialists who were engaged in this transaction agreed that no profit tax was due since the company had registered no capital gains.
Following the positive conclusions of the agencies mentioned above, the transaction took place. The total proceeds, intended for Civilitas, consisted of two parts and totaled approximately $2 million.
Huntsman Building Products transferred US $577,898 and 11,494,000 AMD to the Civilitas account. The total of these two amounts equaled the loans made over the years to Huntsman Building Products by the parent company Huntsman International, which had agreed to forgive the old loans and instead instructed that the total be given to Civilitas.
The second part consisted of 530,000,000 AMD which were transferred from Tigran Karapetyan to Vartan Oskanian from proceeds accrued by the sale, in accordance with written instructions from the Huntsman representative to Tigran Karapetyan that the funds were to go directly to Vartan Oskanian, for Civilitas.
From the funds received, which in dollar terms were equivalent to $1,427,000, Mr. Oskanian has transferred $548,000 to Civilitas, to date. During this time period, $120,000 was accrued in interest. Today, together with the interest, there is $985,000 remaining in Mr. Oskanian’s account, to be used by Civilitas.