Azernews.Az

Tax officers have raided the offices nationwide of Armenia's Russian-owned national power distribution company after the State Revenue Committee (SRC) accused it of withholding about 2 billion drams ($5.3 million) in taxes, Radio Liberty reports.

Electricity Networks of Armenia (ENA) has denied the accusations and condemned the searches conducted by SRC officials at its territorial divisions across the country on October 19.

In a statement issued on October 20, ENA said the searches and the resulting confiscation of some of its financial documents resulted in a "partial loss of manageability" of the electricity distribution network.

It condemned the SRC actions as illegal and warned of "substantial negative impact on the work of the system."

The SRC declined to elaborate on its fraud allegations. A spokesman for the tax collection service said any information released at this point would compromise the "objectivity" of the probe conducted by its Investigative Department.

"The SRC and our company have differing views on the payment of taxes," ENA spokeswoman Natalia Sarjanian told Radio Liberty. She insisted the company has never underreported its earnings.

According to the SRC, ENA paid about 5 billion drams ($13.25 million) in various taxes in the first half of this year, making it Armenia's fifth largest corporate taxpayer.

The figure also represents a more than 50 percent increase over the same period last year.

It is not yet clear if ENA will take the SRC to court. "I can't say anything about that right now," Sarjanian said. "Time will tell."

The power utility has become increasingly profitable in recent years, despite a sizable reduction in domestic electricity production shown by official statistics. It posted 25.1 billion drams ($66.5 million) in profits in 2010, up from 16.7 billion drams ($44.25 million) in 2009 and 11 billion drams ($29.15 million) in 2008.

The figures indicate a remarkable turnaround in ENA's operations. The power grids incurred significant financial losses, estimated at $50 million each year, before being sold by the Armenian government to a British-registered firm in 2002.

They were purchased by a subsidiary of Russia’s RAO Unified Energy Systems (UES) power giant in 2004.