Fortune News | Jun 08,2019
Apr 28 , 2024
The Federal Supreme Court has recently ruled in the prolonged commercial dispute surrounding the share sale agreement of Cosmo Trading Pvt. Ltd, favouring appellant Azeb Mihretab, the founder of JJ Property Management. The court upheld the validity of the share-selling agreement that was inked six years ago, involving Haileyesus Mengiste, a major shareholder of Cosmo Trading, and two other shareholders.
At the heart of the disagreement lies the acquisition of 19 shares by JJ Property and Azeb from Haileyesus, priced at 1,000 Br per share, amounting to 19.9 million Br, back in July 2017. They also acquired 50 shares each totalling 100,000 Br, from the remaining two shareholders.
The crux of the dispute centres on the official transfer of shares. Azeb, as the founder of JJ Properties, has alleged that Cosmo Trading shareholders failed to fulfil their end of the bargain by neglecting to complete the transfer process or furnish the required documentation. Conversely, Haileyesus challenged the validity of the agreement, raising concerns about registration and coercion.
The document reveals that 5.1 million Br was allocated towards the company's tax and other obligations from various sources including banks, institutions, and individuals.
During the legal proceedings, JJ Property Management and Azeb Mihreteab informed the judges that in May 2019, Cosmo Trading shareholders unanimously voted to transfer all their shares. However, amidst the ownership transfer process, the shareholders hesitated to conclude the transaction, prompting the case to be brought before the Federal High Court to compel the completion of the transfer.
In response, Cosmo Trading shareholders counter-appealed to the High Court, seeking to nullify the share-selling contract, citing coercion and alleging intimidation and physical harm inflicted upon Haileyesus. The High Court's verdict sided with Haileyesus, asserting the involuntary nature of the agreement.
According to the subsequent charges, during the loan agreement with Haileyesus, Azeb allegedly used the title deed of his seven-storey building, estimated at 250 million Br at the time, as collateral. A 3.2 million Br of the loan was transferred into Haileyesus' account although he did not sign the agreement. Azeb was further accused of allegedly leveraging the loan and her control over Cosmo Trading for personal enrichment through activities such as money laundering and illegal remittance. This charge was alongside Temesgen Yilma, the general manager at TTH Trading Plc; Haregewoin Tedla, her representative; and Efrem Mulatu, a witness.
Following the High Court's decision on the share sale agreement, Azeb appealed to the Supreme Court, contesting the ruling. Upon thorough review of the case files, the Supreme Court identified discrepancies in crucial aspects such as documentation and tax clearance, ultimately leading to the invalidation of the selling agreement.
Presiding judges Netsanet Tegegn, Estibel Andualem, and Worku Megerssa overturned the Federal High Court’s decision on April 4, 2024, citing insufficient evidence to support claims of coercion. The case has been remanded to the lower court for further deliberation on the transfer and payment of the disputed shares.
Despite this ruling, Haileyesus intends to pursue additional legal recourse through the Cassation Bench in the coming weeks, indicating the likelihood of continued legal proceedings in this protracted dispute.
PUBLISHED ON
Apr 28,2024 [ VOL
25 , NO
1252]
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