Yesu Plc appealed to the Ethiopian Revenues & Customs Authority (ERCA), claiming that the allegations of over 600 million Br in evaded tax made against it were wrong.
This case has been in court since April 2012, when the prosecutors of the ERCA filed charges at the Federal High Court. Seven people, including Yohannes Sisay, owner of the steel factory together with his brother, Yared, have been following their case from prison. Yared is not one of the defendants, the list of which includes the managers of Yesu and Shebel Plc, which distributes their products, and three other individuals.
The company made its appeal to the Review Committee of the Large Taxpayers Office of the ERCA, in a letter written on July 6, 2012, urging the Committee to reconsider the case.
One of the main objections of the defendants in Court was that they should have been given a notice and an opportunity to present their case to a review committee and then to the Tax Appeal Committee, under the Ministry of Justice (MoJ) before criminal proceedings were filed.
Based on proclamations 285/94 and 286/94, the Authority is required to give an assessment notification, if it appears that there is an understatement of tax and the person will be considered in default if they do not pay within 30 days of the notice and demand.
The ERCA sent Yesu the assessment notifications for 242 million Br for sales income tax and 377 million Br for value-added tax (VAT) in letters dated July 2.
The Court allowed Yohannes Sisay and Issayas Teklu, the general manager of Yesu, to follow up their application at the Review Committee under police escort on Thursday, July 26. Yohannes owns 93pc of Yesu Plc, and his brother the remaining seven per cent.
Prosecutors from the Ethiopian Revenues & Customs Authority (ERCA) had charged Yesu Plc and Shebel Plc, a trading outlet for Yesu, for concealing income, presenting false and misleading information, aiding in the commission of crime, failing to register for value-added tax (VAT), and laundering the proceeds of these activities. The money was allegedly channelled to the accounts of Hirut Endale, a niece of Yohannes, Abera Mengstu, and Jember Teka.
All defendants, except for Hirut Endale, Yohnnes's niece who was pregnant, were denied bail and confined to the Addis Abeba Prison Administration Centre. Subsequently, however, Yohannes and Issayas requested permission to participate in the management of their company. The Court granted them permission on June 5, 2012, to be at their offices and factory site twice a week
The case is proceeding at the Federal High Court, Eighth Criminal Bench, in front of Judge Nuredin Kedir, who took over the case from Judge Kedir Mohammed, and the case was adjourned to August 13, 2012.