25 March 2018

Ethiopia: Court Sentences Indian Family for Money Laundry, Tax Evasion in Absentia

Judges at the Federal High Court sentenced the three Indians, Kumar M. Lakhani the CEO of the two Dubai-registered Dubai Auto Gallery LLC and Auto-World International FZC along with his two sons, Monish Kumar Lakhani and Vishal Kumar Lakhani for illegal trade and money laundering.

The two companies were acquitted by the same court alleged for similar illegal trade and the grave crime of money laundering.

Monish and his father Kumar were sentenced to 16 years and a 130,000 Br fine each, while Vishal was convicted to 18 years and 170,000 Br in absentia.

Although Judge Yohannes Nigus, Birtukan Ayele and Girma Debesu convicted the individuals on March 11, 2018, and sentenced them on March 17, 2018, they were initially convicted in July 2016 without defence due to their absentia.

Three of them together were convicted for allegedly engaging in commercial activities in Ethiopia without having a valid business license and laundering the money they made locally.

Along with the fines with his father and brother, Vishal was additionally convicted of tax evasion and engaging in commercial activities without having a valid business license. He was punished with a fine equal to double the revenue earned by him during the period he operated the business without a valid license, and imprisonment.

Vishal was the owner and general manager of Asia Afro Automobiles Plc, which was registered as a Bajaj manufacturing and assembly company in Ethiopia but declared bankruptcy on February 28, 2000.

He was engaged in wholesaling and retailing of the vehicles in Ethiopia without having a licence. And he earned 350.8 million Br from his illegal business without paying value-added tax (VAT), according to the charge instituted against him.

The charge was filed by the federal public prosecutor on September 9, 2014, along with 11 individuals from Ethiopia, Djibouti, Siri Lanka and India, and three companies, of which the convicts own two of them.

The Attorney General alleged the companies and individuals for engaging in commercial activities without a valid license in businesses reserved for domestic investors, tax evasion and money laundering. The Sri Lankan and Indians faced charges for doing business reserved for nationals using the locally registered company as a cover.

The two Dubai based companies were charged with money laundering and tax evasion. Dubai Auto Gallery, established in 2003, has been associated with Bajaj Auto Ltd, the manufacture of two-wheeler and three-wheeled motorcycles.

In the course of the litigation, seven individuals were convicted, including the family of Lakhani and Mohammed Shifan Mohammed, finance head of Dubai Auto Gallery in 2016.

After reviewing the case for almost three years, the Federal High Court freed the two Dubai based companies and convicted the heads of these companies two weeks ago. It also sentenced the two Siri Lankan and one Ethiopian defendant to five years of imprisonment along with monetary fines. Hitijira Yasanta, a.k.a Surendera, Plantawaje Asita, a.k.a Asita, and Ashraf Awel, a manager and minority shareholder of Okapi Impex were the convicts.

Delighted with the conviction of the Indians, Alemlante Agidew, deputy assistant Attorney General and director of Legal Audit & Inspection at the Office of the Attorney General and leader of the case, claims that the companies should have been convicted with the individuals.

"As long as the owners are found guilty, there is no way that the businesses could be acquitted," he told Fortune.

The same court has freed the companies declaring that they committed no crime except a trade which is accepted internationally, according to Yohannes Woldegebriel, a lawyers and who was once a public prosecutor.

"This shows that the Judges were under some pressure," he told Fortune.

The case of the two Dubai based companies, the local company Okapi Impex and its general manager Ashraf, along with the two Siri Lankan convicts are pending at the Supreme Court following the appeal of the public prosecutor.

The parties will set out for another court battle at the appellate bench staring May 9, 2018.

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