30 November 2017

Ethiopia: Court Rules Against Central Bank Over Diaspora Shares Auction

Photo: Addis Fortune
Central National Bank of Ethiopia.

An Ethiopian native with foreign nationality has won a milestone legal battle against the central bank, whose decision led her to lose shares she inherited from her late father but for an undervalued rate.

Sophia Bekele, a businesswoman with American citizenship, lost shares auctioned by the United Insurance Company (UNIC), a company where her father was a founding shareholder.

She was one of the thousands of foreign nationals of Ethiopian origin who have lost shares after the National Bank of Ethiopia (NBE) instructed banks and insurance firms to auction shares under their holdings but pay them at par values of initial formations. The balance between par value and current market offers was transferred to the national treasury. Ethiopia has laws that ban foreign nationals from owning shares in the financial sector.

Although many have objected the decision and grumbled about its fairness, Sophia is the first to challenge central bank's decision with her lawyers taking the case to the Lideta First Instance Court.

Sophia has 288 shares with a 1,000 Br par value inherited from her late father, Bekelle Eshete.

Sophia, who is a founder and CEO of Dot Connect Africa (DCA), appealed for the return of her auctioned shares. She has also requested the Court order for the transfer of her shares.

Judges have ruled ordering the United Insurance reinstate the shares while allowing Sophia to transfer them to a third party of her choice.

Displeased with the ruling, lawyers representing the central bank have appealed to the Federal High Court, on November 27, 2017, which Fortune has established is admitted.

Ethiopia

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