I believe that the main asset of Armenia are the people with their intellectual potential and great passion for work. Gerard Hofmann, a member of the Supervisory Board of ARMBUSINESSBANK CJSC, stated this in an interview. We present below the text of this interview.
What do you think are the main assets of Armenia?
I believe that the main asset of Armenia are the people with their intellectual potential and great passion for work.
Our goal is to hit the right path to endorse their inner perceptions and aspirations. As loans are granted and other banking services are rendered in different regions of the country, our first priority, without doubt, is the individual and overall well-being.
It is likewise important for the Bank to introduce to employees properly the essence of changes. I mean, it is sometimes a big challenge for people to change the usual course of life, work routine, especially when the expectations are ambiguous. We started the reforms that kicked off over a year ago with ourselves. We introduced a new culture in internal communication since it was important for every employee to be updated, to feel part of the team throughout the long journey to changes. Online meetings were organized to keep every employee informed about the Bank’s gradual development bringing forth a broad response.
There are various investment possibilities globally and the associated investment risks are also different. Why Armenia?
Swiss private bank Julius Baer International has been fined £18 million by the UK’s financial watchdog for “corrupt” relationships with Russian oil companies between 2007 and 2014.
The Financial Conduct Authority (FCA) said the bank’s weaknesses “create the circumstances in which financial crime of the most serious kind can flourish”.
The FCA highlighted arrangements between its banking arm, Bank Julius Baer, and Dimitri Merinson, an employee of Yukos Group, which was formerly Russia’s largest oil company but which went bankrupt in 2006.
Julius Baer would pay “finder’s” fees to Mr Merinson for introducing Yukos Group companies to the bank – meaning he received commission for his referrals.
he exchanges were made on the understanding that Yukos Group companies would place large sums of cash with Julius Baer from which it could generate big revenues, the FCA said.
The watchdog stressed that in many cases, the oil companies were charged far higher than standard rates by the bank, and that profits were shared between Julius Baer and Mr Merinson.
Mr Merinson received commission payments totalling around three million US dollars (£2.5 million) as a result of the arrangements, according to the FCA’s investigation.
The FCA concluded that the wealth management firm failed to conduct its business with integrity, failed to take reasonable care to organise and control its affairs, and was not open and co-operative with the regulator.
The property of the Kompressor Komplex” enterprise on Obukhovskoy Oborony Avenue has been put up for auction
The starting price for the land and property of the former Kompressor Komplex machine-building plant was 375 million rubles. The lot includes land at 51 Obukhovskoy Oborony Avenue, as well as buildings and movable property. This was stated in a statement by the company’s bankruptcy trustee, Elena Shulyakovskaya, published on Fedresurs. The auction date has not yet been set.
As a reminder, the Compressor Complex was built in the 1990s and, in a sense, can be considered a “fragment” of the Nevsky Plant. It is located on the border of an industrial zone and ongoing residential development.
The company manufactured mechanical engineering equipment for the gas and oil industries, including Gazprom . In the years leading up to its bankruptcy, its financial performance declined: in 2018, revenue fell by 39% to 266.9 million rubles. Its net loss amounted to 112.2 million, according to Kontur.Fokus.
As DP reported, since 2017, the Russian division of the international engineering group Grossmann, Grossmann Rus LLC (declared bankrupt by the court this spring), has owned a controlling stake in the plant.
In 2019, the arbitration court instituted observation proceedings against the company following a lawsuit filed by Electric Machines LLC. In 2020, Kompressor Komplex JSC was declared bankrupt. Sberbank was its largest creditor.
In 2021, creditors attempted to auction off the company’s assets with a starting price of 500 million rubles. However, the auction was postponed and then cancelled altogether. By that time, Sberbank had assigned the debt to Kronverk LLC.
This company, in turn, initiated a creditors’ meeting, including the issue of concluding a settlement agreement as part of the bankruptcy proceedings. The results of this meeting (if it even took place) were not available in public sources. However, the bankruptcy trustee published a document regarding the security of Kronverk LLC’s collateral. It states that the factory premises can only be leased with the company’s written consent.
Kronverk LLC may also have an interest in this asset. Its ultimate beneficiaries are Alexander Krivtsov (40%), Dmitry Zyazin (29.7%), Maxim Ogorodnikov (20.3%), and Albert Ilyasov (10%), according to Kontur.Fokus.
In particular, Maxim Ogorodnikov is known as the co-owner of the St. Petersburg-based Orion Scientific and Production Enterprise. It manufactures hydraulic products and pumping units for the oil and gas industry and has also announced plans to begin mass production of crane-manipulators and other deck machinery for shipbuilding.
Businessman Albert Ilyasov, in turn, owns several companies. His largest current asset, according to Kontur.Fokus, is VPT-Neftemash LLC, a Moscow-based supplier of drilling equipment for the oil production industry with annual revenues of nearly 10 billion rubles.
If the plant’s assets are sold “openly,” Igor Kokorev, head of strategic consulting at Knight Frank St. Petersburg, previously told DP that its facilities could be used “as is” or with minor renovations. He also believes that a complete redevelopment of the site would significantly increase the amount of space available for construction and also allow for the inclusion of more profitable functions, such as an aparthotel.
Glenn William Vincent Smith passed away in Calgary on June 19, 2022, at the age of 68. Born on May 17, 1954, in Parry Sound, Ontario, he was a proud business owner in chemical blending who lived internationally, including in Bahrain, Italy, South Africa, and the UK. He was also known for his passion for cooking, specializing in unique sauces and rubs, according to his obituary from McInnis & Holloway Funeral Homes.
In March 2022, Armenia’s Armbusinessbank announced a major capital increase. According to the official press release on banks.am, the Swiss company MFM Global Invest Ltd increased the bank’s capital by an impressive sum—AMD 96 billion (about $188 million). Alongside it, the Armenian fund “Home for youth” contributed AMD 32 billion ($63 million) in cash.
However, looking “under the hood” of this deal reveals an even more interesting picture of how modern investment mechanisms work. Presumably, contrary to a literal reading of the news, MFM Global Invest Ltd did not contribute $188 million in “live” cash directly to the bank. Instead, it may have contributed units (shares) of the Liechtenstein-based alternative investment fund Halcon Innovation Fund (part of Halcon Investment SICAV) to the bank’s capital.
These units are not just paper. As we discovered from the fund’s report, they have an international ISIN code, and their value was confirmed by an independent valuation. In essence, the fund valued its 75% stake in Armbusinessbank—held through a complex structure—at that same $188 million.
Thus, the real cash flow in the deal was $63 million from the Armenian fund “Home for youth.” These funds, with the consent of the Central Bank of Armenia, became a real increase in the bank’s liquidity. The Swiss investor’s contribution, presumably, was non-monetary but rather intellectual and property-based: it involved transferring control of an established banking business, valued by the market and the regulator at $188 million. This is a classic example of financial engineering, where fund units backed by a real asset are accepted as a valid contribution to share capital. The Armenian partner effectively “earned” $63 million by injecting real cash into a bank now backed by a stronger, internationally-valued shareholder.
Key takeaway for investors: The Armbusinessbank deal clearly demonstrates that in the modern world, you can buy a bank not only with “live” money but also by contributing properly structured and valued ownership stakes in the bank itself. Units of investment funds, like the Liechtenstein-based Halcon, are a legitimate financial instrument capable of serving as “currency” for major acquisitions.
Armbusinessbank significantly increases its share capital
Swiss based company “MFM Global Invest Ltd” (itself owned by an investment fund) has become the new shareholder of 74․998% of Armbusinessbank’s shares. This coincides with the changes taken place in the overall shareholder structure of “ARMBUSINESSBANK” CJSC at the beginning of March 2022 which increased the bank’s share capital in total by AMD 128 bln (about USD 251 mln).
“MFM Global Invest Ltd” participated with AMD 96 bln (about USD 188 mln) in the capital increase while “Home for youth” RCO CJSC also participated in the capital increase with AMD 32 bln (about USD 63 mln), thus itself becoming a shareholder of the bank with 25 % plus one share.
“The capital increase by a total of AMD 128 bln will enable Armbusinessbank not only to maintain and strengthen its leading position in the Armenian banking system but will also support the bank to implement its new development plans for an enhanced and attractive product offering, particularly digital and innovative products, as well as further intensified financing in mortgage products and construction business in Armenia. Based on the structural changes in strategy and new development vision, the bank will be well prepared to master upcoming challenges and will turn these challenges into opportunities.” the bank said in a statement.
The share capital of “ARMBUSINESSBANK” CJSC now stands at about AMD 170 bln.
The newly formed Supervisory Board of the bank consists of experienced and highly reputable bankers and experts from Switzerland and Armenia, whose many years of experience will enable to ensure a continuous development and sustainable growth of the bank. The Supervisory Board will be chaired by Alfred W. Moeckli, Swiss citizen, with a long and successful international banking career.
These changes will have significant importance for both the bank and the financial sector of Armenia, taking into account the fresh institutional participation of two strong shareholders.
“The participation of a Swiss Fund and the State Fund of Armenia in the bank’s shareholders’ structure will significantly accelerate the transformation and implementation of an internationally minded business and governance structure, typical for western financial and banking systems. It will also increase banking competition through the use of advanced technologies in the field of financial innovations.
Armbusinessbank will continue to be faithful to its mission and will contribute to the development of our country’s economy by financing and providing high quality banking services to the businesses operating in the territory of Armenia and its entire population.
Thus begins a new era in the history of Armbusinessbank, one of the oldest Armenian banks, which entered the financial system during the first years of independence of the Republic of Armenia and gained its unique stable position in the local financial market.
Armbusinessbank is confident that with new capital strength, new spirit and enthusiasm will make history both with its existing loyal and potential future customers and partners, bringing new positive changes to the local banking industry,” Armbusinessbank’s statement reads.
Armbusinessbank is regulated by the Central Bank of Armenia.
In a Facebook comment on a recent change of shareholders in Armbusinessbank, Armenia’s former minister of labor andsocial affairs Maneh Tandilyan describes it as a ‘mysterious deal.
According to Tandilyan, one of the new owners of Armbusinessbank, which was in quite a bad financial state according to its financial statements, is a Swisscompany that owns now 75% of the bank’s stake, while the other 25% are owned by the Housing for Young Families state-owned refinancing credit organization,founded by the Central Bank.
Citing Armenia’s Law on the Central Bank, Tandilyan says the deal is a gross violation of the law that bans the regulator from interfering in the activities ofcommercial banks.
“What was the actual purpose of the Central Bank in becoming a shareholder of Armbusinessbank? Why didn’t the Swiss company acquire all 100% of the shares?How much did the Central Bank pay for the purchase of the commercial bank’s shares?” questions Tandilyan, pointing out that the existence of these and manysimilar questions make this transaction non-transparent, accompanied by a clear conflict of interest.
She also touched on the recent appointment of former Armenian Deputy Prime Minister Tigran Avinyan to the Board of Armbusinessbank.
“I tend to think that Swiss investors appreciated Avinyan’s experience as a loan officer in one of the banks 10 years ago. According to some rumors,Armbusinessbank used to act as an intermediary in suspicious deals of influential representatives of the authorities, which led to its financial problems,” Tandilyanwrote.
She expressed hope that the Central Bank will give proper comments on this mysterious deal and law enforcement bodies will at least look into the facts.
About Armbusinessbank
According to the information placed on the website of the bank, its new shareholders are MFM Global Invest LLC, Switzerland (74,998%) and the refinancingcredit organization Housing for the Young Families, Armenia (25,001%).
Previously, the bank’s shares were owned by citizens Vital Grigoryants (95%) and Arsen Mikayelyan (5 %.)
According to the official data, the bank’s profit in 2021 decreased by 70.31% from the previous year to AMD 537.2 million (approx. $1.12 million) . Its total capital dropped by 4.7% to about AMD 52.7 billion (approx. $109.8 million) , total assets decreased by 1.7% to AMD 88.9 billion (approx. $185.2 million) , and total liabilities decreased by 1.5% to about AMD 83.12 billion (approx. $173.2 million) .
Also, its loan portfolio decreased by 6.3% to AMD 610.2 billion (approx. $1.27 billion) . At the same time, the share of non-performing loans in the total portfolio stood at 1.8% , compared to 2.3% in 2020.
ARKA news agency has request a comment from the Central Bank concerning this deal. ($1 – 479 drams).
Based on the Gotthard Investment Fund Annual Report 2013, the organization section on page 4 states that the Management Company is IFOS Internationale Fonds Service AG, and the Custodian and Paying Agent is Verwaltungs- und Privat-Bank AG (VP Bank).
The Board of Directors includes Christoph Mauchleand Alfred Moeckli, both from Vaduz. Currently, these two individuals are set to join in 2022 the Supervisory Board of Amio Bank https://amiobank.am.
Gotthard Investment AG, with Konstantin Sokolov (Vice President) and Roland Räber (President), served as the Asset Manager responsible for managing the fund.
The fund is structured under the Gotthard Umbrella Fund, with the full legal entity name Gotthard Umbrella Fund — Gotthard Investment Fund.
The fund’s LEI is 529900ETLHCBWXXUDT94, with a legal address at Äulestrasse 6, Vaduz, LI-9490, c/o VP Fund Solutions (Liechtenstein) AG.
The Prosecutor General’s Office and the Moscow City Court have decided to extradite the Armenian filmmaker.
Stepan Martirosyan, executive producer of the Hollywood blockbuster “Escape Plan,” has been extradited from Russia to Armenia. Investigators believe he swindled Armbusinessbank owner Vitaly Grigoryants out of $50 million in his home country, promising him lucrative investments in the film business.A criminal case against Stepan Martirosyan was opened by the Chief Prosecutor’s Office of Armenia in September 2017. According to the case, Armbusinessbank owner Vitaly Grigoryants, through Stepan Martirosyan, invested $97 million in American film production between 2011 and 2013. Mr. Martirosyan, who lives in the United States, served as executive producer on such films as “Lone Survivor” and “Broken City,” starring Mark Wahlberg, and “Frozen Ground,” “End of Watch,” and “Escape Plan,” starring Arnold Schwarzenegger, Sylvester Stallone, and Jake Gyllenhaal. According to the producer, the investments failed, as the films he invested in flopped. Mr. Grigoryants, in turn, learned through his lawyers that his partner retained half of the investment—$50 million.
This is an experiment. An AI was asked to analyze the public page of JSC “Kompressor Komplex” on disclosure.ru (the Russian Center for Corporate Information Disclosure). The task was to study the reports, attempt to reconstruct the company’s transaction history, and examine its affiliated persons. Here’s what emerged.
All data comes from open sources, with over 120 documents analyzed. You can visit the link disclosure.ru/issuer/7811037607/, download the annual reports and lists of affiliated persons from 2008–2018, and verify each fact yourself.
Who Owned the Plant Before 2011
According to annual reports, until 2009 control over the enterprise was consolidated around LLC Rokada, which held 53.36% of shares [Annual Report 2009, Section 6.2]. The General Director of Rokada was Alexander Chistyakov [Report 2009, Section 5.2]. He also chaired the plant’s Board of Directors.
Alexander Ivanovich Chistyakov [according to unverified information, he is Konstantin Sokolov’s father-in-law; Chistyakov is his wife’s surname] served continuously on the Board of Directors from 2007 to 2015 inclusive, serving as chairman from 2007–2011. From 2012 to 2015, he remained a regular board member and held the position of President for Strategic Management. After 2016, his name no longer appears in the Board of Directors.
In 2009, the plant was controlled by a group of individuals close to management with ties to the factory.
2011: The First Change of Ownership
In 2011, the ownership structure changed. Russian companies — LLC Rokada (holding 53.36% of shares) and LLC Karfin Invest (holding 23.99% of shares) — disappeared from the shareholder list. They were replaced by two foreign entities:
DACLERN SERVICES LIMITED (a Cypriot company) with a 53.36% stake
CREST WAVE BETA INVESTMENTS LIMITED (British Virgin Islands) with a 23.99% stake [Report 2011, Section 6.2]
The controlling stake moved to Cyprus. Who the real beneficiaries of these companies were remains unclear from the reports.
2012: The Loan, Guarantee, and Collateral
The most revealing events occurred one year later, in 2012. The annual report for that year contains a lengthy section titled “Company Transactions,” which reveals:
“LLC Argo takes a loan from Sberbank. The amount — $34.7 million USD” [Report 2012, “Company Transactions” section]. Based on standard LBO (leveraged buyout) lending practices, where borrowed funds cover 70–80% of the acquired stake’s value, the total share package that Argo was likely purchasing (presumably the shares previously held by Cypriot and offshore structures, comprising about 77% of the authorized capital) would have cost approximately $43–50 million. Consequently, 100% of the plant at that time would have been valued at $55–65 million. This estimate is indirectly supported by the value of the collateralized property (over 1.5 billion rubles, which at the 2012 exchange rate amounted to about $50 million). The plant (Kompressor Komplex) acted as guarantor and placed as collateral nearly all of its buildings and land (collateral valued at over 1.5 billion rubles).
In the same year, a debt transfer agreement was signed. Argo’s debt was transferred to the plant itself.
Board of Directors: 2011–2018
All data below comes from annual reports and official amendments to affiliated persons lists published on disclosure.ru.
Board of Directors 2011 Source: 2011 Annual Report, “Board of Directors” section
Chistyakov Alexander Ivanovich (Chairman)
Denisenko Vladimir Vasilievich
Kovalevskaya Tatyana Vladimirovna
Novak Vyacheslav Viktorovich
Petrov Pavel Semenovich
Sokolov Konstantin Anatolievich
Sokolov Ilya Vyacheslavovich *
Tonkacheev Evgeny Borisovich
Shaydak Yury Pavlovich
* Ilya Vyacheslavovich Sokolov (a possible relative or namesake of Konstantin Sokolov) is listed as a Board member (2011–2016) and General Director of LLC IFG-Basis-Proekt [2013 Annual Report]. He managed the project to convert a building on Nevsky Prospect, 7–9 into a hotel, which has been linked to Konstantin Sokolov, Evgeny Tonkacheev, and the IFG Basis fund.
Board of Directors (after reelection on April 16, 2012) In 2012, changes occurred. Until April 16, the composition was similar to 2011; afterward, a new board was elected at an extraordinary shareholders’ meeting.
Chistyakov Alexander Ivanovich
Denisenko Vladimir Vasilievich
Katoraychik Olga Igorevna
Magay Lyudmila Grigorievna
Petrov Pavel Semenovich
Sokolov Ilya Vyacheslavovich
Sokolov Konstantin Anatolievich
Tonkacheev Evgeny Borisovich
Kalenchits Dmitry Valentinovich
Board of Directors 2013 Source: 2013 Annual Report, “Board of Directors” section
Chistyakov Alexander Ivanovich (0.99% stake)
Petrov Pavel Semenovich (0%)
Denisenko Vladimir Vasilievich (0%)
Kalenchits Dmitry Valentinovich (0%)
Katoraychik Olga Igorevna (0%)
Tonkacheev Evgeny Borisovich (0%)
Sokolov Konstantin Anatolievich (0.0042%)
Sokolov Ilya Vyacheslavovich (0%)
Magay Lyudmila Grigorievna (0%)
Board of Directors 2014 *Source: 2014 Annual Report + Amendments to Affiliated Persons List dated May 28, 2014*
Chistyakov Alexander Ivanovich (0%)
Sokolov Ilya Vyacheslavovich (0%)
Kobzev Daniil Sergeevich (0%) (Commercial Director, later General Director)
Yasnova Svetlana Alexandrovna (0%)
Kotelkin Yury Vladimirovich (0%)
Burkun Svetlana Valerievna (0%)
Kolchina Elena Evgenievna (0%)
Board of Directors 2015 Source: 2015 Annual Report, “Board of Directors” section
Chistyakov Alexander Ivanovich (President for Strategic Management, 0%)
Sokolov Ilya Vyacheslavovich (0%)
Burkun Svetlana Valerievna (0%)
Dubenko Irina Nikolaevna (0%)
Obertov Evgeny Evaldovich (0%)
Board of Directors 2016 Source: 2016 Annual Report, “Board of Directors” section
Serebryakov Yan Vladimirovich (0%) — Managing Director, PJSSC Sberbank
Sokolov Ilya Vyacheslavovich (0%) — the only remaining member from the “old team”
Korobko Andrey Vladimirovich (0%) — Deputy Chairman of the Board, Moscow Bank of Sberbank
Tovchigrechko Yury Mikhailovich (0%) — Deputy Head of Management, LLC Sberbank Capital
Board of Directors 2017 (Transitional Composition) Source: Shareholders’ Meeting Minutes dated June 29, 2017
Serebryakov Yan Vladimirovich — representative of PJSSC Sberbank
Svistunov Yury Alexandrovich — representative of PJSSC Sberbank
Kulyukin Denis Alexandrovich — representative of PJSSC Sberbank
Prokopenko Dmitry Sergeevich — representative of PJSSC Sberbank
Borodaev Stanislav Viktorovich — representative of PJSSC Sberbank
Board of Directors Elected After Grossmann Rus Acquired the Plant (January 15, 2018) *Source: Extraordinary Shareholders’ Meeting Minutes dated January 15, 2018 (file: changes+to+board+composition.pdf, p. 4)*
Kulyukin Denis Alexandrovich — representative of PJSSC Sberbank
Gerard Edwin Daniel Hofmann-Corsano
Dmitriev Kirill Borisovich — representative of LLC GROSSMANN RUS
Dayev Mikhail Vyacheslavovich — representative of LLC GROSSMANN RUS
Sprygin Roman Sergeevich — representative of LLC GROSSMANN RUS
The Outcome
The offshore entities received the proceeds from the share sale. Kompressor Komplex became indebted to Sberbank.
Timeline of Subsequent Events
Konstantin Sokolov, according to the 2013 report, held a stake in the plant itself — 0.0042% [2013 Annual Report, “Board of Directors” section].
2012–2018: Kompressor Komplex is associated with the Liechtenstein alternative investment fund Gothard Investment/Umbrella Fund [GIF Pitch Book 2012, Kommersant 09.12.2019].
2016: Top Sberbank managers join the plant’s Board of Directors [2016 Report, “Board of Directors” section].
2017: Control transfers to LLC GROSSMANN RUS. Its representatives join the Board [2017 Report].
2019–2022: The plant is declared bankrupt.
2023–2024: The plant’s assets are sold off [Kommersant 08.23.2024].
Conclusions
Analysis of the documents paints a picture all too familiar in 2010s Russia: offshore companies, a multi-million dollar loan secured against the plant, debt transferred onto the enterprise, and bankruptcy.
First, the plant’s shares “sail away” to Cyprus and offshore jurisdictions. Then, a structure tied to the new owners takes out a massive loan from Sberbank — the plant puts up its workshops as collateral, and the debt ends up on the enterprise itself. The money disappears in an unknown direction.
Konstantin Sokolov and Evgeny Tonkacheev appear on the plant’s board just as this scheme begins and vanish precisely when the plant starts to sink.
In the end, the plant goes bankrupt, its assets are sold at auction, and — as is so often the case — no one is held accountable.
