Supressing Business Rivals

1. Introduction and Background

On May 24, 2001 a law which established the so called Federal Ethics and Anti-Corruption Commission was promulgated, with the proclaimed purpose of fighting corruption. And on May, 29,2001 only one working day after the enactment of the law, a number of business persons, officials from the Commercial Bank of Ethiopia, the Ethiopian Privatization Agency, the State Owned Sugar Companies and other high ranking government officials including Ex-Defense Minister Seeye Abraha and six of his siblings were, put under arrest for involving in alleged corruption activities. The arrests continued for a number of days and by the end of July 14 a total of 14 business men and woman from different sectors of the economy along with a dozen of civil servants and officials were arrested, while two wanted persons escaped the arrest by fleeing out of the country.

The arrest was followed by unlawful restraining orders issued by courts to block the accounts and businesses of the victims and their companies. During the last three and half years, in which this order has been in force, it has crippled the businesses of the detainees and their companies as well as devastated the business community and the lending banks.

This paper aims at highlighting the catastrophic impact of the restraining orders to those concerned.

- In section two, the paper covers the profile of the business persons and their companies by touching upon the relations of these businesses with the party owned companies of the ruling party, the EPRDF.

- Section three gives the details of the properties that have been restrained by court orders.

- Section four focuses on the damages inflicted on the properties of the victims and their companies. It also indicates the rulings given by the courts on the petitions by the persons and the lending banks.

- The status of the restraining orders is given in section five, while the last section finishes with concluding remarks and appeals to International Agencies and concerned governments.

2. Background and Profile of the Business Persons

The business persons who were the subject of this imprisonment were Minwuyelet Atnafu, Abebaw Desta, Asnake Jembere, Yeshihareg Zewdie, Abebaw Gelaye, Berhane Gidey, Hiraer Benisenilian, Fitsumzeab Asgedom, Worku Megra, Mehreteab Abreha, Abraham G/Kirstos , Eskinder Joseph, Sami Yusuf and Fiseha Abraha.

These business persons are shareholders/owners and/or managers of a number of companies engaged in the businesses of trading, transport, manufacturing, real-estate, clearing and forwarding, flora culture, etc. These companies have been playing a significant role, contributing in many ways to the economic and social development of the country. In the year 2000, the companies ran by the detainees had a combined annual turnover of Birr 4.0 billion and provided job opportunities for about 7,500 persons. In the transport sector, the companies operated heavy duty dry and bulk cargo trucks which immensely contributed to the satisfaction of the transport needs of the country by hauling about 30% of the cargo transported in the whole nation. In trading the companies also played a key role in the import, export and smooth distribution of goods in the country. In manufacturing, four businessmen run six enterprises that were bought from the Ethiopian Privatization Agency. While government owned and private banks have been their major source of finance, records show that the individuals and their companies enjoyed good relationship with the banks and were servicing their loans regularly and without default, to the satisfaction of the banks.

The short profile of these business persons is given as follows.

a) Minwuyelet Atnafu, a successful business man started doing business on a sole proprietorship basis in the early 1970s and gradually expanded his business in 1900s and 2000 to become the owner/shareholder of several business entities including the well known trading and transport companies, Star Business Group and Tana Transport Pvt. Ltd. Co., respectively. He is also the owner and Manager of Mina Trading Pvt. Ltd. Co.

b) Similarly, Abebaw Desta is a renowned businessman who is also the co-founder (owner) shareholder of Star Business Group and Tana Transport Pvt. Ltd. Co. Together with Minwuyelet, Abebaw owns several other businesses. He is also the owner and Manager of Tiss Abay Trading Pvt. Ltd. Co.

c) Asnake Jembere is an enterprising businessman who started business in a small way and worked very hard for a long time to become an owner of AJMA Pvt. Ltd. Co., a company involved in transport, trading and manufacturing businesses.

d) Yeshihareg Zewdie, one of the few highly successful businesswomen in the country, is an owner manager of Yegeta Trading Pvt. Ltd. Co., a company involved in the business of transport, trading and manufacturing.

e) Abebaw Gelaye is a person who has worked his way up from being an owner-driver to become a successful General Manager of Tana Transport Pvt. Ltd. Co., one of the leading transport companies in the country.

f) Berhane Gidey, an enterprising business man, is an owner of several businesses, including Abeba Gidey Trading House, Bazen Pvt. Ltd. Co. and another Transport Company, that are involved in manufacturing, trading, transport and agriculture sectors.

g) Worku Megra, previously a government employee, is the General Manager of two trading companies, Ethio-Investment Group and Star Business Group Pvt. Ltd. Co..

h) Eskinder Joseph, a returnee from the USA representing the Diaspora, is an owner and founder of Meskel Flower Pvt. Ltd. Co., the first private company established to specialize in the production and export of cut roses.

i) Hrair Behesnillian, an Ethiopian businessman of Armenian origin who started running family business that was established 50 years ago, owns several business entities in diversified areas of trading and manufacturing; like Hagbes Pvt. Ltd. Co., Beza Industries, Debre Zeit Agro Industries, etc.

j) Fitsumzeab Asgedom, who moved from his well established business life in Uganda to his home country in the mid 90s, is an astute business man with several businesses sprawling from trading to manufacturing; employing hundreds of citizens. He owns the only English Language daily newspaper "The Monitor", Gulele Soap Factory, and several Printing Houses.

k) Abraham G/Kirstos, a young entrepreneur who started business in the early 1990s, owns and manages a company that is involved in transport, trading and manufacturing businesses, called ABMAR International Pvt. Ltd. Co.

l) Meheretab Abraha, an enterprising young businessman is the founder and manager of MEFAM Trading Pvt. Ltd. Co., a company that is engaged in trading and transport businesses.

m) Fiseha Abraha, who happened to be a shareholder to MEFAM Trading Pvt. Ltd. Co along with his brother Meheretab Abraha, was a combatant in the EPRDF Army. He was detained under the pretext of corruption with his brother Ato Seeye Abraha and Ato Assefa Abraha.

Most of the above mentioned successful business persons either run companies that are in business competition with the ruling party (EPRDF) owned companies or are said to be relatives to the opposition political persons who were purged from the government machinery and the ruling party subsequent to the split in the party leadership in March, 2001. For example, Star Business Group Pvt. Ltd. Co., and Tana Transport Pvt. Ltd. Co.; the companies (usually called Star Business Group) that are run by Ato Minwuyelet Atnafu, Abebaw Desta, Abebaw Gelaye, and Worku Megra have been business rivals to the party owned companies such as Guna Trading Share Co., Trans Ethiopia share Co., Ambasel Trading Share Co. etc. which are engaged in similar businesses of transport and trading. As these companies were frequently prevailing in the competition, their successes were seen as problems and causes for the losses incurred by the party owned companies, consequently, Ato Meles and his cronies must have been looking for opportunities to weaken them. The same applied to other business persons and companies engaged in transport and trading businesses.

Regarding relations, Meheretab Abraha and Fiseha Abraha are the younger brothers of Seye Abraha and Assefa Abraha, who were the Ex-Defense Minister and Head of Public Enterprises with the rank of Minister respectively. Abraham G/Kirstos, Berhane Gidey and Fitsumzeab Asgedom are said to be related by blood or marriage to the dismissed political rivals of the PM.

The detention of these people, in the guise of fighting corruption is therefore aimed at weakening the political dissidents as well as the business competitors of Prime Minister Meles Zenawi and his party owned companies.

3. Restraining Orders by Courts

The above mentioned business persons were put under arrest together or at the same time with Ato Seye Abraha under the pretext of involving in corruption activities. With their bail rights denied by a special Proclamation which was enacted on June, 2001 with the objective of keeping Ato Seeye in prison, charges were later on leveled against them by the so called Federal Ethics and Anti-Corruption Commission. The charge alleges that they took loans from the Commercial Bank of Ethiopia (CBE) in contravention to bank rules and procedures and also purchased enterprises from the Ethiopian Privatization Agency and CBE.

It took more than six months for the government to concoct what were called the charges and presented them to the courts in December 2001. Despite the desperate efforts to create a link between the businesses people and Ato Seeye Abraha, no business relationship was found to serve as a pretext. Ato Seeye and his siblings were finally charged separately while the business people were charged for taking loans from the CBE, along with over 30 Bank officials including the President and all Vice Presidents.

Furthermore, restraining orders which brought the properties of the detainees and their companies under the control of the state were issued by the Federal High Court and by the Federal Supreme Court in early July 2001, before even the so called charges were filed.

Locked up in jail, the owners of the properties were not even called, when after two months of imprisonment this shocking decision was given by the courts. Both the Federal Supreme Court and the Federal High Court issued restraining orders which brought the properties of the arrestees and their companies under the control of state authorities and enterprises.

The suspicions raised by the haste to arrest Ato Seeye and all the business people, just one day after the laws were enacted; followed by the amendment of the laws within 24 hours in order to block Ato Seeye's release on bail, were finally confirmed by this draconian ruling of the courts. The political motivations and targets of the so called Anti-Corruption Campaign were laid bare for every body to see.

3.1 Restraining Order by the Federal Supreme Court

On July 18,2001 an officer from the Central Bureau of Investigation lodged an application on behalf of the Anti-Corruption Commission, listing the properties of the detainees, stating that these properties were acquired by commission of corruption offence and requesting the court to issue restraining order on these properties. In accordance with the request and without even giving the detainees the chance to give their opinion, the Federal Supreme Court, on July 19,2001 issued a restraining order to block the accounts and businesses of Fistsumzeab Asgedom, Hirair Behesnilian, Mehreteab Abraha and Fiseha Abraha.

Ato Seeye Abraha, on the other hand, had no property or money to be restrained, despite the efforts made by the commission.

The one sided ruling which was issued before charges were leveled and without the knowledge of the victims or their lawyers stated that:

a) Seven Bank Accounts of Fistumzeab's, his family and his businesses with a value of Birr 9,591,142.00 and including three enterprises, which he had previously bought from Ethiopian Privatization Agency, viz. Gullele Soap Factory, Harar Printing Press and Taitu Hotel be blocked and the companies be put under the custody of various Stated Owned Enterprises (SOE);

b) Four accounts with a value of Birr 29,300,277.00 of Hrair's, and his businesses including Debrezeit Food Industry, previously bought from the Ethiopian Privatization Agency and shares with a value of Birr 29,300,277.00 invested in Wegagen Bank and the benefits to be obtained from the shares to be blocked and the Food Industry be put under the custody of SOE.

c) Five accounts of Mehretab's and his businesses in different bank's branches with a value of birr 836, 901.00, his shares in Bank of Abyssinia with a value of Birr 500,000 and the benefits; to be obtained; plus 20 trucks and small vehicles and 14 trailers be blocked and the trucks and vehicles be put under the custody of a Public Transport Enterprise.

d) Fiseha's two saving accounts with a value of Birr 18,900.00 be frozen.

Although the account of certain Assefa Abraha (a name sake) and his wife holding Birr 86,189 was also ruled to be blocked by mistake, it was unblocked later on by the actual owners, on the other hand neither money nor property was found in the name of the accused Assefa Abraha.

This draconian ruling was not unanimously issued. It was dissented by one out of the five judges. The dissenting judge was then removed from the bench by the orders of nobody, but the PM himself.

The table here under shows 13 accounts with a total value of Birr 40,279,334.34; 34 truck trailers and small vehicles, four manufacturing and service giving enterprises and shares with a total value of Birr 500,000.00 that were ruled to be blocked.

Table 1 - Assets Restrained by the Supreme Court Rulings

	Owner/ Shareholder	Assets /Restrained/
		Enterprises	Vehicles			Bank Accounts		Shares
		Enterprises	Trucks and Small Automobiles	Trailers	Total	No.	Amount in Birr	Bank Name	Amount in Birr
1	Mehretab Abraha	-	9	4	13	2	1,334,458	-	-
2	MEFAM Trading Pvt. Ltd. Co.	-	11	10	21	2	2,449	Abyssinia	500,000
3	Fitsumzeab Asegdom	Taitu Hotel	-	-	-	7	9,623,250	-	-
		Harar Printing	-	-	-	-	-	-	-
		Gulele Soap Factory	-	-	-	-	-	-	-
4	Hrair Behesinlian	Debrezeit Food Industry	-	-	-	-	29,300,277	-	-
5	Fiseha Abraha	-	-	-	-	2	18,900	-	-
	Total	4	20	14	34	13	40,279,334	-	500,000

3.2 Restraining Order by the Federal High Court

3.2.1 Similar to the Federal Supreme Court and as per the request of an officer from the Centeral Bureau of Investigation, the Federal High Court on the 27^th of July 2001, issued restraining orders to block and freez the accounts and businesses of Minwuyelet Atnafu, Abebaw Desta, Abebaw Gelaye, Worku Megra, Asnake Jembere, Abraham G/Kiristose, Eskinder Yosef, Yeshihareg Zewde, Berhane Gidey and their businesses.

The order given in the absence of the victims or their lawyers and before charges are leveled against the victims stated that the documents gathered indicate that the properties held in the names of the suspects or their companies were acquired by the commission of corruption offence and it was decided to block the accounts as well as, prohibit the selling, exchange and transfer of the ownership of the properties.

It was also ruled that a committee comprising of individuals from the Commercial Bank of Ethiopia, Ethiopian Chamber of Commerce, Ethiopian Investment Authority, Ministry of Justice, and Ministry of Labour and Social Affairs be established to administer, and be custodians to the restrained vehicles, shares and bank accounts.

Thus the properties ruled to be blocked, frozen and administered by court appointed officials were: -

a) 12 vehicles registered under the name of Star Business Group, and its 10 accounts with a value of Birr 164,074.00 that are in 10 branches of different banks.

b) 49 trucks and 12 trailers registered under the name of Tana Transport Pvt. Ltd. Co.

c) 28 trucks and automobiles with ownership of Ethio-Investment Group Pvt. Ltd. Co. and registered under the name of ETAMO.

d) 19 trucks and 23 trailers registered under the name of AJAMA Trade and Industry Pvt. Ltd. Co.; and its two accounts with a value of Birr 606,268.00 in the CBE's branches of Gola and Anwar ;

e) 21 trucks and 19 trailers registered under the name of ABMAR International Pvt. Ltd. Co.; and its 2 accounts with a value of Birr 653,592.00 in Dashen Bank's branches at Dessie and Gola.

f) 53 trucks and 58 trailers registered under the name of Tiss Abay Trading Pvt. Ltd. Co., and its 2 accounts with a value of Birr 2,402, in Mercato Wugagen Bank.

g) 101 trucks and automobiles and 74 trailers registered under Mina Trading Pvt. Ltd. Co.

h) The share which Abebaw Desta, Minwuyelet Atnafu, Worku Megra, Star Business Group, Mina Trading, AJMA Trading and Industry, Tana Transport Pvt. Ltd. Co. and Tiss Abay Pvt. Ltd. Co. own in the Bank of Abyssinia and the benefits to be obtained from the shares.

i) The share which AJAMA Trading and Industry own in NIB International Bank and the benefits to be obtained from the shares:

j) The share which ABMAR International own in Hebret Bank and the benefits to be obtained from the shares.

k) 34 trucks and 35 trailers registered under the name of Abeba Gidey Trading Pvt. Ltd. Co. and its 3 accounts with a value of Birr 1,268,974 in the Dilla branches of Awash International Bank and Bole and Dilla branches of CBE.

l) 41 trucks and 32 trailers under the name of YEGETA Trading Pvt. Ltd. Co..

m) 6 trucks registered under the name of Meskel Flower Pvt. Ltd. Co., and its 3 accounts with a value of Birr 85,759 in Bole branch of the CBE and Ayer Tena branch of Bank of Abyssinia.

n) Berhane Gidey's two accounts with a value of Birr 251,149.00 in the Bole and Temenja Yagze branches of CBE.

o) Yeshihareg Zewde's five accounts with a value of Birr 35,382 in the two branches of CBE and Dashen Bank.

The table here under shows the total properties ruled to be blocked viz. thirty-three accounts with a value of Birr 3,070,373.00; 370 trucks and automobiles, 271 trailers and shares with a total subscribed capital of Birr 31,525,000.00 and a paid up capital of Birr 10,683,244.00 and the benefits to be obtained from the shares.