YEREVAN. Jan 19 (Interfax) - The Armenian National Security Service has accused David Galstyan, a former advisor to Defense Minister Davit Tonoyan and the owner of the company Royalsys Engineering, which manufactures Kalashnikov assault rifles in Armenia, of embezzling and misappropriating budget funds on a large scale.
"The investigative directorate of the National Security Service has decided to indict Galstyan in a criminal case dealing with the embezzlement and misappropriation of finances from the state budget on a large scale," the Armenian online news service Civilnet reported, citing the National Security Service.
The crime was committed through the criminal collusion of officials from the Defense Ministry and the Main Staff of the Armenian Armed Forces with Galstyan's Mosston Engineering company registered in Seychelles, it said.
Galstyan is implicated in four criminal cases opened by the National Security Service. He owns a number of offshore companies, as well as a company in Armenia engaged in arms trading.
Galstyan, as head of Royalsys Engineering, and Kalashnikov Group Deputy CEO Andrei Baryshnikov signed a contract in August 2018 on starting the manufacture of AK-12 and AK-15 assault rifles in Armenia.
Vardan Ghukasyan, a former official with the Defense Ministry's military police, in November 2020 publicized documents purporting to uncover arms trading schemes involving former Defense Minister Tonoyan and his former advisor Galstyan.
According to those documents, Tonoyan and Galstyan concluded a contract setting up Mosston Engineering as an offshore company, under which the Defense Ministry paid it $3.5 million to procure weapons. The company was also granted exclusive rights to acquire military hardware and ammunition on behalf of the Defense Ministry.
President Armen Sarkissian discharged Tonoyan of his duties as defense minister at Prime Minister Nikol Pashinyan's request on November 20.
The Defense Ministry denied the reports on its leadership's involvement in arms trading in November 2020.