Board Members Seek Government Support in Access Debacle

Board members and representatives from the central homebuyers’ committee of Access Real Estate (ARE) have jointly selected ASGB chartered accountants to re-audit the 2012 financial statements of the troubled company, for close to 640,000Br.

The two parties have expressed discontent with the content of the initial 2012 audit report by Kokeb & Moges. This concluded that the company would face difficulty in continuing business, citing as major problems the demand by homebuyers for a refund of their money and the company’s severe capital shortage.

ARE  has collected 1.3 billion Br from 2,500 homebuyers and 31.8 million Br from shareholders, but the company’s founder and CEO Ermias Amelga departed to the USA and then Dubai, leaving the company in a financial mess.

Shareholders and the homebuyers committee want to revive the company and make it deliver on its promises. This, according to the audit report, seems unlikely. According to a memorandum of understanding (MoU) they signed on July 16, 2013, the two parties  want to start the restructuring by contributing an additional 5,000Br per shareholder. They also wanted a second opinion on the company’s financial standing, according to Acklog Seyoum, chairperson of the central homebuyers’ committee.

The audit by Kokeb & Moges, which has supervised the company’s books since 2008, avoided endorsing the ARE’s financial statement, claiming that some of the items, such as the receivables, were not properly documented.

The board and shareholders are working hard to ensure that the missing documentation is included in the second audit, according to Acklog. So far they have approached Access Capital, where ARE is known to have made several investments, and ARE’s subsidiary real estate companies.  However, most of these companies are not willingly providing information, according to him, claiming that they did not have appropriate authorisation. This is because previously they have dealt with Access, or directly with Ermias.

To get the appropriate endorsement, the board and chairmen called a meeting of all buyers at the Ethiopian Electric and Power Corporation (EEPCo) meeting hall, inMexico, on Sunday August 31, 2013. After informing buyers of the plan, shareholders and the board asked homebuyers to sign a petition asking for the government’s involvement in the board members and homeowners move to restructure the company. While some asked how the new board and homebuyers could be trusted, others were happy to sign the petition.

“In addition to bringing back Ermias Amelga fromDubai, so that he can be accountable for his actions, the petition will also request the government’s involvement in helping us obtain financial information from unwilling subsidiaries,” Akclog told Fortune.

A contract is yet to be signed with ASGB, Acklog says. This is because they first want the government to become involved in sorting out the company’s problem. ASGB (Asrat, Gezahegn and Birberssa Audit General Partnership – Chartered Certified Accountants) provides services in Ethiopian and the UK.


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