Recently the “Armenbrok” Investment Brokerage & Consulting Company, registered and operating in the capital of Armenia, made serious attempts to drag incautious foreign investors into a legally dubious, if not completely illegal, affair on privatization of the hydroelectric power plant in the occupied Azerbaijani province of Nagorno Karabakh. In a letter sent to a large number of “potential partners” (who, in fact, represent reputable investment institutions world-wide), the Armenia-based broker, Samvel Sahakyan, advertised and offered for sale an enterprise that is located in a foreign country and, thus, is the property of that country, – the so-called “Artsakh HEK OJSC”. He invited the companies to buy the shares of the “to-be-privatized” power plant that is currently the only energy producing enterprise in Nagorno Karabakh.

In the letter, the occupied region of Nagorno Karabakh was introduced as the “Nagorno Karabakh Republic”, which was supposed to give an impression that this is a stable territory or even a sovereign state. Mr. Sahakyan also mentioned that until recently the power plant was fully “state-owned”, yet the “government of NKR” decided to open it for privatization and begin to sell its shares. However, the broker failed to explain to his potential clients how an enterprise can generally be state-owned or even offered for sale when there is no internationally recognized authority in the area and the territory is known to be essentially occupied and run by illegitimate structures. The U.S. Department of State’s Report on human rights explicitly mentions “[E]thnic Armenian separatists, with Armenia`s support, continued to control most of the Nagorno-Karabakh region of Azerbaijan and seven surrounding Azerbaijani territories.”

Furthermore, in his letter Mr. Sahakyan indicated about his employer`s intention to implement the plan of selling the shares of the Nagorno Karabakh hydroelectric power plant through IPO and NASDAQ OMX, which was, apparently, supposed to give additional credibility to the entire affair.

Obviously, foreign businesses must be cautious about making any investment plans in any region that is controlled by unlawful separatists. Nagorno Karabakh is one of such no-law territories. All industrial, public and other enterprises (except private residential properties of local residents) in Nagorno Karabakh and seven adjoined regions remain the property of the Azerbaijan Republic, the government of which reminds that any acts of privatization or investment as well as business and sale-and-purchase contracts signed and implemented during the years of Armenian occupation have no legal force. After the liberation of the occupied territories and restoration of the constitutional order, no compensation will be made to the investors for the loss of their businesses or illegal ownerships in the occupied territories of Azerbaijan, including its Nagorno Karabakh province.

Meanwhile, it is difficult to avoid noticing two quite amusing elements in the letter. One is about the “closing date” (or, simply, deadline!) set by the scam Yerevan-based brokers. We understand that, if a serious western investor happens to be late for one day, obviously, his application will not be considered by the Armenian cheats. Surely, deadline is deadline. The second funny part comes when the author beings to talk about the “energy security of NKR”. Apparently, the unrecognized regime has already settled all other problems, and “energy security” and “energy independence” is now the only concern of this “state”, just like in the EU.

Once again, all the foreign investors are called to be extremely cautious about making any business, commercial, trade, investment or other economic plans in the currently uncontrolled Azerbaijani region of Nagorno Karabakh, and, in the event of engaging in such activities, they must at all times remember that all their actions are being taken at their own economic risk and following the restoration of the constitutional order the confiscation of illegal businesses and properties will lead to no financial compensation.

Vugar Seidov

Special correspondent of AZERTAC

Berlin