Jul 11 , 2021

Properties belonging to MIDROC Foundation, including construction machinery and vehicles, are up on auction a year after losing a legal battle to Achim Braun of Mediterranean Group EA.

Achim, a former employee and shareholder of MIDROC Foundation, took the case to court six years ago, claiming that Mediterranean Group EA was owed 21.8 million Br from a total of over 50 million Br it claimed for machinery rental service agreements the two had entered. Achim has a 98pc share in the Mediterranean Group, a company he formed after leaving MIDROC Foundation Specialist Plc, where he had owned 20pc shares.

MIDROC Foundation had entered a rental service agreement with Mediterranean Group when Achim served as Cheif Executive Officer of the former. MIDROC Foundation was rebranded in 2005 with an initial capital of seven million Birr, having employed 92 individuals. It was initially established in 1998 under the name Bauer-MIDROC Foundation Specialist Plc, a grade-one contractor and a subsidiary of MIDROC Investment Group.

Lawyers representing MIDROC Foundation argued that Achim's former position in MIDROC and his shares in the company put him in a conflict of interest and led to the improper award of the rental services contract. MIDROC also accused Achim of allowing his company, Mediterranean, to take spare parts from MIDROC Foundation's machinery.

Judges at the Federal High Court ruled in favour of the Mediterranean Group, ordering MIDROC Foundation to pay the full sum. Unhappy by the ruling, lawyers of MIDROC Foundation appealed before the Supreme Court, where justices sustained the ruling. The company took the case to the Cassation Bench, with no success to get justices to overrule the lower courts.

Liku Worku, consultant and attorney at law, believes the ruling by the Court of Cassation was just, for the claim by the Mediterranean Group was valid.

"What matters is the contract signed by the two," said Liku. "If MIDROC Foundation doubted the contract, they were not supposed to sign."

The signing of the contractual agreement when Achim was the General Manager of the foundation company does not give leverage for the appellant to reject the contract, according to Liku.

The difficult part for the plaintiff was finding assets under the defendant possession to be auctioned off. There are no private execution officers in Ethiopia providing services of tracking assets on the plaintiff's behalf. Executions of judgement fall under the courts' preview, although the task of tracking assets goes to the plaintiff.

Mediterranean Group had moved onto the execution of the judgment. It could not find assets as most MIDROC Foundation's properties were held as collateral by the Dashen Bank. Mediterranean Group later resorted to listing assets that were not under injunction. Vehicles were sold for 6.6 million Br, leaving close to 13 million Br to be recovered.

"We had the ones that had no claims," said Mishame Yohannes, general manager of Mediterranean Group and spouse of Achim Braun.

These included 12 vehicles sold off last year.

Close to 18 properties worth millions have now been put up for auction by the Judgment Execution Directorate of the High Court.

The auction was kicked off on July 1, 2021, in MIDROC Foundation's compound. Although interested bidders showed up, Mediterranean Group pushed the sales for September in hopes of attaining more offers, according to Mishame.

Achim has relocated his business to Rwanda and Tanzania.

Officials at MIDROC Foundation were unavailable for comment.

PUBLISHED ON Jul 11,2021 [ VOL 22 , NO 1106]

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