An alleged shareholder of Sunpay Solutions S.C., Bruck Fikre, has filed a lawsuit seeking the recovery of his claimed shares, originally valued at 1.3 million Br. The legal action follows a series of operational failures and internal disputes that culminated in the National Bank of Ethiopia (NBE) revoking Sunpay's payment system operator license.
Sunpay Solutions, a fintech subsidiary of Sunshine Investment Group, was licensed in January 2022 to operate as a payment gateway and provide point-of-sale (POS) machine services. The license came with strict conditions, including a two-month pilot period to implement required technology, establish policies and procedures, and train board members and management on payment systems.
Sunpay failed to meet these requirements, leading the NBE to revoke its license on August 27, 2024. The central bank had requested an explanation for noncompliance in June 2024, but Sunpay did not respond.
The NBE cited multiple violations of the National Payment System Proclamation and related directives. Sunpay did not commence operations, appoint a Chief Executive Officer, or renew its license. Bruck claimed that the company also failed to conduct shareholder meetings as required by the Commercial Code of Ethiopia. The central bank mandates a physical office, report on its pilot program, or request an extension for the pilot period.
Despite a letter attached to the license identifying Kirubelawit Sahilu as the CEO, Sunpay did not fulfill its obligations, prompting both regulatory action from the central bank and legal challenges.
Sunpay Solutions' internal and regulatory troubles have deepened as an alleged shareholder Bruck has filed a lawsuit demanding the company's dissolution. The company failed to hold required board meetings and regular general assemblies, as mandated by business law, according to Bruck. Companies are legally required to hold at least one general meeting within four months of the financial year's end.
Bruck claims the lack of meetings has jeopardised Sunpay's operational stability and financial transparency. He argues this failure has hindered his ability to “safeguard his rights as a shareholder”, including access to information about the status of the company’s POS machine sales.
Sunpay Solutions was established with an initial capital of 13.47 million Br, divided among ten shareholders, each contributing varying amounts between 260,000 Br and 1.95 million Br. Key shareholders include Samuel Tafese, president of Sunshine Investment Group, alongside other members of the Tafese family and entities like Prince Trading. Each share was valued at 1,000 Br, with Bruck allegedly purchasing 1,300 shares for 1.3 million Br as a founding member.
Despite obtaining its license in January 2022 after applying in October 2020, Sunpay has faced persistent issues. Bruck claimed that the company has never paid dividends, as required by law, after accounting for taxes, reserves, and other liabilities.
Bruck’s lawsuit, filed at the Federal First Instance Court Commercial & Investment Arada District Bench, seeks the dissolution of Sunpay Solutions. He has demanded the liquidation of company assets, with proceeds distributed to shareholders based on the results of an independent audit. If dissolution is not legally feasible, Bruck has requested for a cash buyout of his shares and the reimbursement of legal fees.
Ethiopia’s regulatory environment for payment system operators has seen major changes. In 2022, the central bank introduced a directive allowing non-financial institutions to provide payment operator and instrument issuer services, roles previously exclusive to banks. This change spurred private sector interest in digital payment gateways, with Sunpay Solutions among those seeking to capitalise on the opportunity.
The NBE has strict rules for revoking operator authorisations. Licenses can be cancelled if obtained through false information, if operators violate conditions, repeatedly commit faults, fail to address shortcomings, do not start operations within 12 months, or become insolvent.
Operators facing revocation must submit a written response within 30 days. Failure to do so or an inadequate response leads to license cancellation. The NBE may also suspend authorisations if operators fail to comply with regulations or pose a risk to financial stability.
The case involving Bruck and Sunpay has been adjourned to January 20, 2025, when four witnesses, including alleged shareholder Bruck, will testify.
PUBLISHED ON
Jan 12,2025 [ VOL
25 , NO
1289]
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