Agenda | Oct 17,2021
Aug 28 , 2021
By SAMUEL BOGALE ( FORTUNE STAFF WRITER
)
Close to 23,200 shares of Akir Construction Plc registered under Seifu Ambaye are to be auctioned off by judges at the Federal High Court.
Presided over by Judge Frehiwot Teshome, the Federal High Court had first passed the verdict in April this year, nearly eight months after Awetahegn Kiros, founder and previous major shareholder at Akir, filed a lawsuit. He accused Seifu of issuing cheques without sufficient funds, following Seifu's acquisition of an 80pc stake in the construction company for 16 million Br.
Akir Construction was incorporated in 2004. One of the pioneers in the construction industry, it was involved in large road projects, including Beredimtu to Emin, Gerecha, Zada to Wechecha and Sawela to Kako road projects.
Akir's assets and shares worth over 23 million Br under Seifu will be sold off to the highest bidder.
Seifu and his brother, Yekunoamlak Ambaye, both family members of the construction magnate Tekleberhan Ambaye, acquired Akir in July 2017, offering 20 million Br to buy out shareholders Awetahegn and his daughter, Tsion. The new owners received at least 2.3 billion worth of projects following the acquisition, including a 1.3 billion Br project the Ethiopian Roads Authority (ERA) awarded the company for an 86Km road in Benishangul-Gumuz Regional State.
However, Awetahegn filed a lawsuit with the Federal High Court in October 2020, concerning five cheques of 13 million Br Seifu had written between November 2019 and March 2020 to pay for the acquisition. The cheques have all bounced, claimed the plaintiff. He claimed his approaches to the Commercial Bank of Ethiopia (CBE), where Seifu held an account, on four separate occasions in early 2020, confirmed that the account holder did not have the funds to cover the cheques.
Attempts to check whether the previous owner received the three million Birr difference bore no fruit as Awetahegn was unavailable for comment.
The same month the lawsuit was filed, Akir's headquarters were auctioned off for 203 million Br by the Commercial Bank of Ethiopia (CBE) after the contractor defaulted on loans it had taken using the property as collateral.
The eight-month gap between when the cheques were issued, and the lawsuit was filed has no pertinence to the case, says Gebeyaw Simachew, a corporate lawyer with 14 years of experience. If the cheque drawer receives a letter of confirmation from the cheque payee (bank) stating that the account has an insufficient balance, the documents and cheques are valid to go to court for up to a year, according to Gebeyaw.
Two months after the initial filing, judges of the High Court ordered the defendant to settle the 13 million Br in full. An appeal from the plaintiff led to an amendment, and Seifu was ordered to pay nine percent interest on the full amount along with 43,000 Br in fees and an additional half a million Birr to cover Awetahegn's legal expenses.
However, Seifu did not settle the payments. In April 2021, the Court ordered that vehicles and machinery under Akir Construction, as well as 23,200 shares registered under Seifu, be put up for auctions. The floor price is set at 1,000 Br per value, and the auction will open on October 7, 2021.
Attempts to reach Seifu Ambaye for this story were unsuccessful.
PUBLISHED ON
Aug 28,2021 [ VOL
22 , NO
1113]
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