Dispute Over Prime Addis Property Ends in Acquittal, Leaves a Trail of Legal Scars

May 4 , 2025. By AKSAH ITALO ( FORTUNE STAFF WRITER )

For Temesgen Yilma, a businessman known for running Yilma Butchery, a popular eatery serving raw beef in Adama (Nazareth) before opening an eponymous Yilma Restaurant in Addis Abeba, the past half dozen years felt like slow motion. Every now and then, he shuffled into a packed courtroom to answer charges that seemed to multiply each time prosecutors amended their brief.

On paper, he and six codefendants, among them Azeb Mihretab, an Ethiopian American who runs JJ Property Management from North America, were accused of money laundering, breach of trust, illicit banking and an improvised list of financial crimes. In practice, Temesgen felt they were fighting for something less abstract: the right to reclaim money, which he believed they had already poured into "a debt swamped company," Cosmo Trading Plc.

Three weeks ago, Justices of the Federal Supreme Court set the final period on the longest-running white collar case, throwing out every count and confirming an earlier acquittal by judges at the Federal High Court.

“Justice, however late, will find its way around,” Temesgen said, calling the judgment “a long overdue vindication.”

The ruling erased pending jail terms and travel restrictions, but it did not erase the bitterness that had grown on both sides of the row.

Cosmo Trading owns a seven story glass and concrete block near Wello Sefer Roundabout on Africa Avenue (Bole Road), leased to the Chinese run OneHau Hotel. In July 2017, Azeb and her firm acquired 19,900 shares from majority shareholder Haileyesus Mengistu at 1,000 Br par value, transferring 19.9 million Br. They acquired 100 additional shares from two minority shareholders. Part of the consideration, court records show, was the commercial property that bankers pegged at 50 million Br. The deal, registered before a notary and witnessed by lawyers, looked routine enough until relations between buyer and seller soured within months.

Haileyesus, a former leather exporter turned property owner, later told federal officials the share transfer had been extorted. He claimed Azeb’s entourage had muscled its way into the negotiations, subjected him to “duress and physical harassment,” and walked off with corporate documents. According to his complaint, Cosmo Trading’s new owners then used the company as a funnel, drawing bank loans in the company's name, siphoning the cash to related entities, and laundering a portion through the parallel forex market.

He wrote to then Attorney General Adanech Abiebie, now mayor of Addis Abeba, pleading for help, an unusual step that pushed the affair into criminal territory.

In 2019, state prosecutors filed a 29 page charge sheet naming four individuals, Azeb, Temesgen, Mesfin Asmamaw, Cosmo Trading’s former general manager, and an associate, as well as three companies, JJ Property, TTH Trading and Boston Real Estate.

Prosecutors rewrote their brief three times to stay within the evolving penal code. They charged that 61 million Br was taken as working capital loan and a 10 million Br short term facility from Awash Bank; 21 million Br applied to clear Cosmo Trading’s old debts; 32.5 million Br routed to JJ Property; seven million Birr to Boston Real Estate; and 16 million Br covering TTH’s liabilities. They accused Temesgen of pocketing 14.4 million Br in rent from the hotel and another 1.4 million Br from selling a grader, a construction machine.

A separate file alleged that four of the defendants ran an underground remittance service, swapping Birr in Addis Abeba for foreign currency parked in Europe and the U.S.

Defence lawyers denied every allegation, calling the money movements “ordinary internal transfers of a company drowning in more than 40 million Br of legacy debt.” They cited an earlier civil judgment that upheld the share sale as valid and appealed to judges that the prosecution was bound to prove criminal intent beyond a reasonable doubt.

The Federal High Court panel — Judges Adem Seid, Yenenesh Bahiru and Imiru Tolera — found the defence argument persuasive. On April 16 this year, they dismissed the first count, a compound allegation of breach of trust and money laundering, before asking the defence to present a single exhibit, saying prosecutors had not even shown the existence of a predicate offence. The second count, unauthorised banking and illegal remittance, collapsed when bank statements showed that the loans from Awash Bank had been used to pay overdue suppliers long before the disputed share transfer.

The three remaining counts fell in sequence.

Outrage was immediate.

“I was robbed of my right and property,” said Haileyesus, vowing to appeal.

Under legal procedure, criminal appeals move first from the Federal High Courts to the Supreme Court; beyond that lies the Cassation Bench, a five-justice panel that only reviews errors of law. Haileyesus filed petitions in both venues and launched a parallel request to merge the criminal and civil tracks, arguing that contradictory findings on the share transfer had sown confusion.

While the criminal case grabbed headlines, a companion civil suit churned quietly.

In 2019, Azeb asked the High Court to compel Cosmo Trading’s shareholders, mainly Haileyesus, to register the share transfer and hand over the minutes book, tax records and board resolutions, which she said proved her majority stake. Haileyesus counter sued, insisting he had signed under threat and claimed never to have received the full 19.9 million Br. The High Court initially sided with him, voiding the sale.

Azeb appealed and won at the Supreme Court, which reinstated the deal after finding gaps in the alleged duress and noting that some tax clearances were missing, a clerical oversight the judges called curable.

That legal whiplash drew attention at higher levels of government. In 2021, intervention from high offices urged both parties to accept mediation. A committee of well known business figures, including Degfe Bula; Biniam Bidawi, major shareholder of Zablon Rea lEstate; and Eskender Desta, promoter and shareholder of Habesha Cement S.C.; as well as Solomon Mequria and Endris Ibrahim, both businessmen, met the adversaries for weeks.

Talks collapsed when Haileyesus declined to concede ownership. With mediation dead, prosecutors pressed on.

According to Yared Seyoum, a criminal lawyer who followed the proceedings, prosecutors bear the greatest responsibility to explain the case.

“Defendants can remain silent unless the state produces airtight evidence,” he told Fortune.

The Supreme Court’s ruling now shifts that burden back to the Ministry of Justice.

Melaku Michael, a prosecutor and deputy director for economic crimes, told Fortune his team is combing through the docket to decide whether to appeal to the Court of Cassation.

"We’ll be thoroughly evaluating the presented materials alongside the legal documents and witness testimonies and decide whether to appeal within a month," he told Fortune.

By statute, any petition should land within 30 days of the judgment’s publication, leaving scant time to craft fresh arguments. Justices serving the Cassation panel rarely disturb lower court acquittals unless they find the law misread.

According to legal experts, money laundering charges require proof that the defendants concealed proceeds of a separate crime. Once the breach of trust theory failed, no predicate offence remained. The unauthorised banking count depended on tracing foreign exchange movements, but customs forms and SWIFT records apparently showed nothing untoward.

“The prosecution’s narrative did not connect the dots,” Yared told Fortune.

Temesgen would prefer the saga end here. According to him, Cosmo Trading’s balance sheet was “on life support” when JJ Property and TTH Trading stepped in, and that every Birr transferred to sister companies covered payroll, suppliers or emergency maintenance that kept the property open.

“We were merely taking back what we had invested,” he said, a position the courts ultimately accepted.

Nonetheless, the ordeal leaves scars. Over five years, the defendants were summoned to several hearings. Their passports drew red flags at airports. Banks baulked at lending to entities named in the indictment, freezing expansion plans. Azeb spent long stretches shuttling between Washington and Addis Abeba. Temesgen says prospective partners dropped deals after Googling his name.

“It's been a huge distraction, emotionally and financially,” he told Fortune.

Haileyesus insists the fight is far from over. He pressed on his claim that he never saw most of the money agreed to transfer his shares, and that signatures acknowledging payment were forged. He disputes the valuation of the property; one contract pegs it at 60 million Br, but he claims it is worth at least 250 million Br. He argued the criminal and civil files should have been merged from the start.

If the Cassation Bench finds merit, it could remand the civil dispute for retrial, reopening questions over who owns Cosmo Trading’s flagship building and the rental revenue it throws off. For now, the seven story block  will be generating rent, a reminder that the underlying asset, unlike court verdicts, never sleeps.

Legal experts say the affair uncovers Ethiopia’s fragile corporate governance plumbing. Share transfers often rely on private agreements notarised before being lodged with the Ministry of Trade, which maintains no realtime public register. When conflicts erupt, overlapping civil and criminal actions can paralyse companies, tie up property deeds and scare away lenders.

The authorities often pitch Ethiopia as a frontier market hungry for foreign capital; experts warn that prolonged litigation may spook wouldbe entrants over contract administrations and dispute resolution.

On Bole Road, traffic slides past Cosmo Trading’s mirrored façade, the glass panes reflecting midday sun. A property manager collects rent that, for now, flows into accounts controlled by Azeb’s side. The defendants’ legal team is preparing a separate motion to remove caution notices on the title deed, hoping to restore collateral value for refinancing.

Across town, Haileyesus tries to map the next round. He says he will pursue every forum until he recovers what he calls "stolen property."

“An unfair judgment has been made,” he told Fortune.

Word spreads quickly in Addis Abeba’s tight business corridors, but memories linger longer. Even if no further appeal succeeds, both sides will carry the imprint of a deal gone sideways in a city where fortunes and fallouts often travel together, shoulder to shoulder, down the same crowded avenues.

PUBLISHED ON May 04,2025 [ VOL 26 , NO 1305]

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