In 2003, when A. Utilities was managing the Yerevan Water & Sewerage Company for the fourth year, it managed to run up Massive Expenses of more than Fifty-Five Million Dollars, losing nearly Fifty Million Dollars of
This is how it happened:
Throughout the period of the Municipal Development Project, when the International Operator, A. Utilities managed the Yerevan Water & Sewerage Company, the Company paid virtually none of its major electricity expense. So in January 2002, the Company had an electricity debt of about $18 Million – and Rising. The Government issued a Decree allowing the Company to ‘Write Off’ that debt, on the understanding that the amount should be used in 2003 for Increasing the State Shares in the Charter Capital of the Company. In the same year, the Company transferred the same debt (which was scheduled to be converted to Capital) to the state Company Haigasart, as required under the Government’s Finance Rehabilitation Plan. (Accounting twice for the same $18 million Dollars)
The same Government Decree allows the Company to convert an unknown part of a loan it had received from the Government and use it for Increasing the State Shares in the Charter Capital of the Company, ‘Writing Off’ the balance.
The Company had at least one Government loan of about $17 Million, because it had not paid for its electricity up to the time of the Municipal Development Project. About $5 Million of that was used to Increase the State Shares in the Charter Capital and the remaining $12 Million was Written Off. That provided an extra $12 Million Dollar income for the Company.
Then, in 2003 the Government gave the Company a grant of a little more than $18.5 Million Dollars, for Increasing the State Shares in the Charter Capital of the Company.
So, in the year 2003, under the management of the International Operator A. Utilities, the Yerevan Water & Sewerage Company received benefits of:
Eighteen Million Dollars – Electricity Debt Written Off, to be Converted to Capital
Eighteen and a Half Million Dollars – Government Grant, to be Converted to Capital
Five Million Dollars – Government Loan Written Off, to be Converted to Capital
Twelve Million Dollars – Government Loan Written Off, to be shown as Income
In the year 2003 the Company received benefits of Nearly Fifty-Four Million Dollars
Of which Forty-One and a Half Million was apparently to be Converted to Capital
But in the same year, the Company recorded Revenues of only about Six Million Dollars
And in that year, the Company recorded Expenses of Fifty-Five Million Dollars.
So in 2003 the Company lost nearly Fifty Million Dollars of taxpayers Money
And in 2003 the Company fraudulently recorded that it Converted to Capital the Government grant of about 18.5 Million Dollars, because in 2003, the Company did NOT increase the Charter Capital.
These are some of the reasons why