Government Hands Cascade Reconstruction to Bankrupt Businessman: A Deep Dive into Yerevan’s Controversial Deal
YEREVAN, Armenia – The Armenian government and Yerevan Municipality have come under scrutiny after awarding a significant investment project for the reconstruction of the upper part of the iconic Cascade to a consortium whose key investor, Grigor Ter-Ghazaryan, was declared bankrupt just four years prior. This revelation, uncovered through an investigation by “Azatutyun” (Freedom) radio, raises serious questions about the transparency and integrity of public tenders in Armenia.
The “GTB Development” Consortium and its Questionable Leader
The tender for the Cascade reconstruction was won by “GTB Development” LLC, owned by Grigor Ter-Ghazaryan, who is reportedly the brother-in-law of Aram Sargsyan, chairman of the ruling “Republic” party. To execute the project, “GTB Development” formed a consortium with two US-registered freight companies, as well as the newly established “Real G” and “GTB Development” companies, both also owned by Ter-Ghazaryan.
The reconstruction program, approved by the government and implemented by the Yerevan Municipality, involves the alienation of approximately 7 hectares of land around the Cascade to “GTB Development” for 10.5 billion drams (approximately $26 million USD). In addition, the company has pledged to invest over 20 billion drams (approximately $50 million USD) in the development of the area. The total project value is estimated at $70 million. “GTB Development” has also committed to building a concert hall for 1000 people and a museum in the area, to be handed over to the municipality.
On December 5, 2025, the Municipality and “GTB Development” signed the agreement for the “Cascade Cultural Hub” project. Official documents state that the consortium is comprised of companies with “international experience in various business sectors and a successful track record in relations with states, with shareholders possessing international business connections and reputation.”
A History of Debt and Bankruptcy
Despite the official narrative, a closer look at Grigor Ter-Ghazaryan’s financial history reveals a troubling past. Four years ago, he was declared bankrupt by a court for failing to fulfill loan obligations to “Ardshinbank.”
“Azatutyun” reviewed the bankruptcy case, which showed that in March 2008, Ter-Ghazaryan received a 2 million dram loan from “Ardshinbank” which he failed to repay. By 2018, accumulated debts, including penalties, reached 8.6 million drams, rising to 10 million drams by 2020. In February 2020, the court granted the bank’s claim, declaring Ter-Ghazaryan bankrupt and placing an arrest on his movable and immovable property. A bankruptcy administrator was appointed.
Creditors in the case included “Ardshinbank” (10 million drams), Yerevan Municipality (over 4 million drams for municipal taxes and duties), and “Al Baraka Pharm” company, which had a 48.5 million dram claim against Ter-Ghazaryan, though this claim was later withdrawn for unspecified reasons.
The bankruptcy administrator reported that Ter-Ghazaryan had no registered movable or immovable property in his name, having sold two BMW cars years earlier. He did, however, hold a 60% stake in “Arm-UAE Management and Consulting” company, valued at a mere 60,000 drams. The administrator deemed this too insignificant to pursue further bankruptcy proceedings, given the absence of other assets.
According to bankruptcy administrator Aram Mkrtchyan, the case did not conclude with a recovery. Mkrtchyan recalled that Ter-Ghazaryan stated he was unable to pay, and checks of his bank accounts revealed them to be empty. Mkrtchyan also noted that due to Ter-Ghazaryan’s civil marriage to Nono Sargsyan (daughter of Armen Sargsyan, brother of Vazgen Sargsyan), her assets could not be seized. Court documents show Nono Sargsyan owned a Rolls-Royce and a Mercedes-Benz in 2021.
Ter-Ghazaryan himself informed the court during the bankruptcy process that he desired a recovery but lacked the means. When asked if “Ardshinbank” could revisit the 10 million dram debt given Ter-Ghazaryan’s current ventures, the bank stated that “with the decision of the completion of bankruptcy, the debtor was released from repayment of his obligations to the bank.” The bank declined to comment on whether it continued to finance Ter-Ghazaryan or his affiliated companies, citing banking secrecy.
More Unpaid Debts
Ter-Ghazaryan’s history of unpaid debts extends beyond “Ardshinbank.” Court records show that in March 2008, he received a $5,000 loan from “Inecobank.” By the summer of 2011, the bank sued him for unpaid interest, and in 2014, the court ordered Ter-Ghazaryan and the loan guarantor, “Intergalaxy” company, to pay $4,652.
In 2016, “Orange Armenia” (now “Ucom”) also filed a lawsuit against Ter-Ghazaryan for unpaid internet services dating back to 2012. The court ruled that Ter-Ghazaryan owed “Orange Armenia” 17,100 drams.
Ter-Ghazaryan’s Defense and Municipality’s Stance
When questioned by “Azatutyun” about how he could undertake a multi-billion dram investment project just three years after being declared bankrupt, Ter-Ghazaryan responded that the bankruptcy case was closed and the creditor did not object.
“The decision has entered into legal force, and as before that moment, so after the decision, there are no legislative prohibitions or restrictions for me to engage in social, educational, entrepreneurial, or other public activities. It is precisely on these grounds that I have continued to engage in my activities, and as you mentioned, improved and expanded them,” he stated, adding that he had a different perspective on the bank debt but chose not to voice it during the bankruptcy proceedings, considering it a private matter now.
Regarding the possibility of fraudulent bankruptcy, Ter-Ghazaryan emphasized that “it is not the obligation of the bankrupt person to justify or deny it.” He pointed out that “the creditor applied to the court to declare me bankrupt, and not I made the application.”
Ter-Ghazaryan claims the tens of billions of drams for the Cascade reconstruction will come from the consortium’s four companies, in the form of loans, and from the sale of commercial spaces to be built on the Cascade lands.
The Yerevan Municipality, when asked about its due diligence on the consortium’s financial capabilities and the investors’ past financial situations, stated that the function of checking the financial status, credit accessibility, and debt burden of companies and their owners is reserved for banks.
The Municipality further responded that for the Cascade Cultural Hub project, the company submitted letters from three Armenian banks confirming full financing for the project, as well as guarantee agreements with two companies included in the consortium, “on the basis of which they assume subsidiary liability for the implementation of the project.” The Municipality stressed that it would not act as a guarantor for any loans involved.
Unanswered Questions and Potential for Conflict
This investigation leaves several critical questions unanswered:
- How did a businessman with a documented history of bankruptcy and unpaid debts secure such a significant public project?
- What was the extent of the due diligence conducted by the Yerevan Municipality and the Armenian government?
- Are the tender conditions, which required participants to have constructed at least 30,000 square meters in the last 7 years and a gross turnover of no less than 20 billion drams in the last three years, truly designed to ensure fair competition, or do they favor specific entities?
- What is the true source of the multi-billion dram investment, and what are the potential risks for the city of Yerevan should the project face financial difficulties?
- Given Ter-Ghazaryan’s familial ties to a ruling party official, is there a potential for conflict of interest or undue influence in the awarding of this contract?
The awarding of such a high-profile and costly project to an entrepreneur with a questionable financial past raises serious concerns about accountability and transparency in Armenia’s public procurement processes. The public deserves a full and transparent explanation of how this decision was made and what safeguards are in place to protect taxpayer money.
Source: https://verelq.am/hy/node/168795
