Two senior local government officials in Yerevan were arrested on Thursday as the National Security Service (NSS) continued a criminal investigation into a municipal fund overseen by Mayor Taron Markarian.

The arrested officials are Ashot Ghazarian, the executive director of the Yerevan Fund, and Khachatur Kirakosian, the deputy head of the city’s Davitashen district.

The NSS would not say whether criminal charges have already been levelled against them. “An investigation is underway and further information will be provided,” a spokesman for the law-enforcement agency, Samson Galtsian, told RFE/RL’s Armenian service (Azatutyun.am).

The arrests were made the day after NSS officers searched the offices of the Yerevan Fund located in the main municipal administration building. They confiscated many documents kept there.

An ensuing NSS statement said two individuals were recently forced to make hefty payments to the Yerevan Fund in return for receiving construction permits from the municipality. It said a part of the “large amounts” of cash paid by them was pocketed by corrupt officials.

Mayor Markarian is the chairman of the fund’s board of trustees. His deputies as well as other senior municipal officials also sit on the board.

Markarian’s spokesman, Artur Gevorgian, downplayed this fact following the NSS raid.

“I have not spoken with the mayor on this subject,” Galstian said on Thursday, commenting on the arrests. “In any case, the mayor has always stood for objective investigations and non-interference in the actions of law-enforcement bodies.”

Markarian came under pressure to step down after mass protests brought down in late April Armenia’s former government headed by Serzh Sarkisian. He is a senior member of Sarkisian’s Republican Party of Armenia (HHK). The protest leader, Nikol Pashinian, took over as the country’s new prime minister on May 8.

Even before the change of government, senior members of Pashinian’s Civil Contract party alleged that the municipal administration may be extorting illegal payments to the Yerevan Fund in return for various services provided to businesses or citizens. Two of them sued the fund in March after it refused to disclose its donors.