ETHIOPIA – A known businessman is threatened with a loss of 26.2 million Br, after the government issued a legal notice to auction his shares with Coca Cola’s bottlers in Ethiopia, the East Africa Bottling S.C.
The shares belong to Nigussie Hailu, one of five Ethiopian partners who bought the state-owned Ethiopian Bottling Share Company, in 1995, from the then Ethiopian Privatization Agency.
He is the only person who remains working in the country, fighting court battles related to corruption charges involving former Prime Minister Tamrat Layne, for two decades now.
Only recently, the Execution Directorate of the Federal Supreme Court floated 11,054 shares of the East Africa Bottling S.C. for auction, each worth 2,372 Br. The auction is scheduled to take place on March 3, 2016, at the Court’s premises on King George VI St., near Yekatit 12 Hospital.
The battle is, however, not yet over, according to people who are familiar with the case. In April 2015, the government’s bid to pursue the shares was later suspended after Nigussie managed to get an injunction order from the Court of Cassation.
“I don’t take this auction as a last stage in the process,” said a mid-level manager at the East Africa Bottling.
Nigussie may once again enjoy another injunction as he is said to have appealed; this time around seeking an administrative recourse from the Prime Minister’s Office. He challenges the move as “unfair” and sees himself a victim of several mistakes, omissions and inaction by successive officials of the Ministry of Justice.
Nigussie was convicted, alongside Shadia Nadim, her son, Hussein Abedella, and Munir Duri, in what was the first landmark corruption case in the country, dubbed “1/89” in judicial circles. The case was directly opened with the Supreme Court, as it involved Tamrat, while he was the Prime Minister during the transition period and later Deputy Prime Minister and Defence Minister.
The court judgment on the 1/89 file had an order summarizing three main criminal liabilities: illegally taking and sharing among themselves 16 million dollars borrowed from Mohammed Ali Al-Amoudi (Sheikh); illegal export of 1,000tn of coffee; and manipulating a government purchase in a manner that harmed the interest of the public. In 2000, the Supreme Court, presided over by five justices, including the Chairperson, Menberetsehay Tadesse, passed a ruling sentencing the defendants to imprisonment for criminal liability and monetary punishments.
It had also ruled to re-institute 4.2 million dollars to the government to recover the loss of coffee, which was claimed to have been illegally exported on the order of Tamrat through Shadia’s company, and 16 million dollars to Al-Amoudi.
On priority right of re-institution, the justices had ordered that the government collect from Shadia 4.2 million dollars, which the Ministry of Justice had requested in the equivalent of 26.2 million Br. It also ordered the government to give whatever was left of its claim to Sheikh Mohammed.
Immediately, the lawyers of Al-Amoudi got a nod from the Court of Cassation to directly execute the decree of the Supreme Court. Article 99(2) of the previous Penal Code allowed a court to decide on civil issues, which is the pecuniary effect directly related with the criminal action, without the need to open a different civil case.
It was Yoseph A’emero, a judge, who presided over three different execution and substantive files related with the cases. In two of these cases, both Al-Amoudi and the government were represented by the same lawyer, Teshome Gebremariam, a prominent corporate lawyer who had served as a minister during the Emperor’s reign.
This, despite the parties’ competitive interests in the same gains, particularly money in accounts.
These accounts included one of Shadia’s in a bank in Djibouti, the Bangue Indosuez Mer Rouge Djibouti Bank, as well as another at the same bank under Ramius Plc. Shadia was the major shareholder in partnership with her son, Hussein.
Other accounts included one of Shadia’s and another in the name of Blen Getachew, reportedly the son of Tamrat, in a bank in Switzerland, the Banko Indo Geneva.
Ethiopia’s government had expressed that Al-Amoudi had stronger financial and technical capacity to claim assets internationally, according to Mulugeta Ayalew, director of the Civil Cases Directorate at the Ministry. A specially designated ad-hoc committee, assigned to the task, was formed under Ali Suleiman, now Commissioner of the Ethics & Anti-Corruption Commission, then Deputy Justice Minister.
The committee ceded the mandate to Al-Amoudi to pursue the collections, after the government signed a Memorandum of Understanding with a two year-term and an agreement to share the collected money equally. Al Amoudi’s 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 recovered his losses from the two accounts at the Swiss bank, as well as from the sale, in August 2007, of 53,000 shares of Nigussie and 63,000 shares of Hussein at East Africa Bottling.
Interestingly, Nigussie’s and Hussein’s shares at East Africa Bottling were bought by Abinet Gebremeskel and Dereje Yesuswork, a.k.a. Jambi, both close confidants of the Sheikh.
Nonetheless, the agreement to share the recovered fund equally is yet to be honoured, with the government still at court trying to get its money, according to an expert at the Ministry of Justice. The details of the MoU between the two parties’ had “failed to materialize once the money was recovered both from the international banks and locally auctioned properties,” said the expert.
“The Ministry fully admits the gap created at this point,” a staffer at the Ministry with deep knowledge of the case told Fortune. “It should have appealed to stop the sale of shares.”
When Al-Amoudi had recovered his money, only 18 million Br was left for the government, of a total claim now amounting to 70 million Br, including the interest. The Ministry of Justice had that 18 million Br blocked.
“It would have been wise for the government to block the shares, instead of seizing cash without interest,” a source close to the issue commented on basis of anonymity, crudely projecting that the value of the shares would have reached close to 300 million Br if they were active today.
“It’s true that the court proceedings took a much longer time than it should have, negatively affecting the parties,” Mulugeta admitted during an interview with Fortune last week. “However, both parties have contributed to the delay.”
He, however, blames administrative reluctance and information gaps within the Ministry during the time lapse. But, he argued that mistakes in the past should not stop the Ministry from making things right now.
“Never too late to correct mistakes,” said the Director.
The series of events changed when the Ministry of Justice filed a new civil case in March 2007 against five defendants. One of these was Gullelat Tilahun, then head of the Ethiopian Coffee Authority, whom the Supreme Court had absolved of any criminal responsibility, thus no related financial gains.
The case was brought before the same judge, Yoseph, who had said that the Ministry could not claim interest on the 4.6 million dollars which the government was claiming from the sale of coffee.
The Judge heard an elaborated version of the case that included not only the claim to re-institute the value of coffee but also detailed claims accounting for transport costs, customs payments and other related incomes that the government was supposed to get from the transaction. In this ‘new’ file, the claim was cautiously crafted to include interest calculations, too.
The role of Nigussie and Hussein in this case was more depicted in the transaction paper work that allegedly led the government to lose the deserved benefit.
“Looking back, strict interpretation of the res judicata principle of can be revoked, but we were cautious in crafting the civil claim,” said Mulugeta.
“The rationale behind the charge was to redress all the gaps and losses that were incurred by the government both from the criminal actions of the defendants and the main gaps and missed opportunities (and therefore the public), in the execution process.”
In the parlance of law, res judicata refers to a matter that has been adjudicated by a competent court and therefore may not be pursued further by the same parties.
In November 2011, Al-Amoudi was ordered to pay the government 905,158 dollars, the difference between the nine million dollars he was allowed to re-institute from accounts in the Swiss bank and what he was actually owed. This sum was owned not only to him but also to the government.
The Ministry of Justice once more failed to collect this money, as it was overruled by the High Court, based on reasoning that the extra money should be offset by the expenses incurred by Al-Amoudi in the process.
But the Ministry managed to stop Al-Amoudi from going after Shadia’s accounts in Djibouti.
The delayed effort last year to reclaim 2.5 million dollars from Shadia’s account at Banque Indo-Suez Mer Rouge bore no fruit.
The bank has informed the Ministry of Foreign Affairs, through the Ethiopian Embassy in Djibouti, that the account has been closed.
The independent civil case filed after seven years left nothing for the government except putting an injunction order on close to 20 vehicles under the defendants’ names and blocking the account with a balance of 18 million Br.
The decision introduced a new modality of liability on each and everybody, shared among Shadia, Hussein, Nigussie and Tamrat.
“When two or more parties are jointly and severally liable, each party is independently liable for the full extent of the injuries from the act,” according to Liqu Damtew (PhD), a practicing lawyer.
This has put Nigussie on the wrong side of the law. He was requested to shed his properties under an execution file in 2010, tabled for Judge Yoseph.
The Ministry has so far managed to collect 700,000 Br and 200,000 Br, respectively, from the accounts held by Nigussie’s mother and in the name of Tamrat’s son, out of a total claim of 26.2 million Br. It has also collected the 18 million Br left over from sale of Nigussie’s share.
The Judge, however, changed his mind in the execution file opened on June 2, 2010, absolving Nigussie of any liability in relation to the 26.4 million Br (4.6 million dollars) on which the Supreme Court decided and ordered execution, putting the sole responsibility on Shadia and her property. Nigussie was, however, made liable related to transaction costs amounting to 1.5 million Br.
After almost a year, officials at the Ministry of Justice appealed against this decision, only to fail to convince the three justices of the Supreme Court: Assegid Gashaw, Amare Amogne and Tsegaye Asemamaw. The case landed at the Court of Cassation.
On December 22, 2015, the Court of Cassation ruled in favour of the Ministry, ordering the four defendants to pay what is owed to the government, including interests to be calculated until payment is fully settled jointly and severally.
The Ministry now has a right to claim close to 70 million Br from the single defendant present in the country, Nigussie.
Nigussie has lodged his complaints to the Prime Minister’s Office, arguing that he should not be made accountable for all the claims against other defendants.
Early last week, the Ministry responded to the Prime Minister’s Office that Nigussie should pay the whole sum, and then the Ministry could help him recover his money from the other defendants, an official of the Ministry disclosed to Fortune.
Neither is the Ministry’s appeal to revise the amount using the current exchange rate. This case has been adjourned for March 2016, helpful news to the anxious Nigussie.
Every decision made at any level, both in substantive and executive, has always been appealed upon reaching the seal of the judicial system, the Cassation Court, with judgments and orders changing from one level to the next.
The long ordeal of the case appears to have exhausted the judiciary; it seems to have shifted to the extra-judiciary process, the good governance front, which might open possible avenues for reviews, according to someone who has closely followed the case over the last 20 years.