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Ethiopia: Court Freezes EIG Account after Alleged Failed Deliveries
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Addis Fortune (Addis Ababa)
11 March 2008
Posted to the web 11 March 2008
Issayas Mekuria
The Federal High Court froze the account of Ethio Investment Group (EIG), importer and distributor of BMW, Ford, Land Rover and SCANIA vehicles. Following the ruling passed by the Eighth Civil Bench, the Gofa Branch of Wegagen Bank SC, wrote a letter to the High Court on March 1, 2008, stating that it has frozen 798,637 Br belonging to EIG.
The Court checked the mobility of the bank account after Akir Construction Plc filed a lawsuit on February 28, 2008, demanding payment for an agreement EIG allegedly failed to fulfil.
According to Akir, the Group established by 26 affluent capital businessmen and various companies, has taken 1.2 million Br agreeing to deliver seven automobiles; Rangers, double-cab pickups and Fords. However, Akir claims that EIG supplied only three of the automobiles.
Akir and EIG signed the agreement on November 15, 2007, with the signatures of Awetahegn Kiros, general manager of Akir and Husamudin Seifu, sales and marketing manager of EIG. The agreement entails the supply of the vehicles 15 to 20 days after signing, reads the charge.
"EIG had requested to repay the remaining money stating that it cannot supply the four vehicles to no avail," disclosed Akir.
Paying 180,000 Br for each vehicle according to their agreement, Akir demanded the price of the four allegedly undelivered vehicles amounting to 720,000 Br. It also has requested the Court to pass a verdict compelling EIG to pay 240,000 Br it claimed to have spent to open the lawsuit as well as a nine per cent interest on the money it received as of December 7, 2007.
Akir also had appealed for the suspension of any bank account under AIG's name. Subsequently, the High Court froze EIG's account, which was established in 1999 with 43 million Br capital.
The company was formed after buying Etamo Plc, then importer and distributor of SCANIA, from the Commercial Bank of Ethiopia (CBE). Among the shareholders of EIG are Star Business Group, Nile International Trading, Sunrise Plc and Dire Industry. The number of shareholders has now dropped from 26 to 13.
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The plaintiff, Akir Construction, is a grade-one construction company established 12 years ago by Awetahegn and his family. Among the constructions it has finalised are the Bank and Insurance Professionals Training Institute in Kaliti that belongs to the National Bank of Ethiopia (NBE) as well as the airstrips of the Jijiga Airport, the seat of the Somali Regional State. It is currently constructing Assosa Airport's airstrips.
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