SABCO settles Ethiopia shares case, buys out local shareholders

ETHIOPIA – The dispute between the shareholders of East African Bottling Share Company, bottler of Coca-Cola, was settled after the South African Bottling Company (SABCO) bought the shares of Abinet Gebremesqel, Munir Duri and Dereje Yesuworq for one Billion Birr (US$ 37 million)

Out of the total, the former shareowners paid 200 million Br in government taxes and shared the residual amount.

Abinet took the lion’s share at 400 million Br while the other two divided the balance.

“We decided to sell our shares following the disagreement with SABCO,” Abinet told Fortune.

Munir, Abinet and Dereje have been in contention with the major shareholder of the Company over dividends and not being included on the Board of Directors.

They also demanded the authentication of their entitlement documents by the Document Authentication & Registration Office (DARO).

They also accused SABCO for misusing over 600 million Br.

The case had reached the High and Supreme Courts where the three individuals claimed the issues mentioned above.

To their dismay, both courts rejected their allegations, favouring SABCO, a company that has a presence in seven countries, with 18 plants employing 9,000 workers.

After the Courts’ ruling, the two parties have been negotiating with and without arbitrators over the issue until they agreed to a share buyout.

The case has involved the interest of three parties: the three individuals, SABCO and the government of Ethiopia, expending efforts to sell Nigussie Hailu’s shares.

He has been fighting court battles for over two decades on corruption charges involving the then Prime Minister Tamrat Layne.

Nigussie, Munir, Shadia Nadim, her son, Hussein Abedella and SABCO partnered to acquire the state-owned Ethiopian Bottling Share Company in 1995, from the former Ethiopian Privatisation Agency, now changed to the Ministry of Public Enterprises.

They formed the company as a private limited company, which was later transformed into a joint venture arrangement in 1999 and named it East African Bottling S.C.

The Supreme Court convicted the three patrons of the company: Nigussie, Shadia, and Hussein, in a corruption case which directly went to the Supreme Court as it involved Tamrat Layne.

The Court evicted the convicts for squandering and sharing 16 million dollars borrowed from Mohammed Ali Al-Amoudi (Sheikh); illegal exports of 1,000tns of coffee; and manipulating a government purchase in a manner that harmed the interest of the public.

In 2000, the Supreme Court imprisoned the defendants for criminal liability and also passed monetary punishments.

It ruled to re-institute 4.2 million dollars to the government to recover the loss of coffee, claimed to have been illegally exported on Tamrat’s order through Shadia’s company, and 16 million dollars to Al-Amoudi, an Ethio-Saudi tycoon currently in detention in Saudi Arabia for alleged corruption.

Based on priority right of re-institution, the justices had ordered the government to collect 4.2 million dollars, which the then Ministry of Justice (MoJ) had requested in the equivalent of 26.2 million Br.

It also ordered the government to give whatever was left of its claim to Al-Amoudi.

His share, according to the ruling, was 556,324 dollars to be recovered from Nigussie; 6.44 million dollars from Hussein, and nine million dollars from Shadia.

Al-Amoudi has recouped his losses from the two accounts at the Swiss bank, as well as from the sale of 53,000 shares of Nigussie and 63,000 shares of Hussein in August 2007.

Their shares were bought by Abinet and Dereje, a.k.a. Jumbi, close associates of the Sheikh, in 2007.

The remaining shares of Nigussie, the only defendant living in the country, were auctioned by the government last year.

The then MoJ appealed to the Supreme Court and received a favourable ruling of 70 million Br settlement from him and the remaining co-defendants.

But Nigussie could have managed to get higher Court’s injunction of the auction, which is under suspension until now.

“We sold our shares after negotiating with the company, preserving our benefits and advantages,” said Abinet.

The 2013 audit report of East Africa Bottling has demonstrated that it has netted a 245.56 million Br profit in that year.

It has two operational plants in Addis Abeba and Dire Dawa, and another under construction in Bahir Dar.

Addis Fortune

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