Gov’t Declines to Return Liquor Factory to its Former Owner

After being disappointed with the final response of the Ministry of Public Enterprises (MoPE) for refusing the restoration of the National Alcohol and Liquor Factory (NALF) to its former owner Berhane Gebremedhin, Berhane is looking to sue the government claiming it has to pay him 250 million dollars in compensation.

Berhane has been asking the government to return the liquor factory for the past 19 years. But the government is refusing to return the companies, claiming a fear of monopoly in the market by offering a compensation for the claimant.

A Greek man named Elias Papasinos established the company in 1920. But Berhane acquired it in 1976 from Elias for 100,000 Br, which was equivalent to 50,000 dollars with the exchange rate at the time.

But the property was nationalized by the kelate (official’s oral or written order to nationalize properties) without referring to the relevant proclamation or any law during the Dergue regime, and the company got its current name, NALF.

The Dergue nationalized Elias Papasinos, located at Mexico, Elber Alcohol Factory located at Aqaqi, and Sebeta Alcohol Factory located at Sebeta, as well as a warehouse located in Mekenisa.

In 1995, after the EPRDF took power, it announced the establishment of the Ethiopian Privatization Agency to privatize nationalised properties. It also announced the properties that were nationalized by the militant government by kelate would be returned to the former owners.

After the announcement, the Ethio- American claimant Berhane, asked for the restoration of his companies in 1995. After three years of reviewing his claims, in 1997 the Agency wrote him a letter approving the restitution of the properties inside the Elias Papasinos, excluding the building, stating it was constructed after the company was nationalized. The Agency also approved the restitution of the Aqaqi plant to Berhane.

However, the Agency did not accept Berhane’s ownership claim over the properties at Sebeta and Mekanisa. But it gave him an option to pay the equivalent amount the government invested on the Sebeta and Mekanisa properties; totaling 26.4 million Br including the price for the building at the Mexico plant. As an option, if Berhane declined to fully handover the properties, the government would pay him compensation which is equivalent to 2.8 million Br.

After the Agency’s decision, the claimant responded that he chose to pay 26.4 million Br and acquire the company fully.

Just three days after Berhane showed an interest to pay the money and own the company, he was forced to leave the country in 2000 following the Ethio-Eriterian border dispute, as he was Eritrean-born.

Three months after he left, a letter from the Prime Minister to the Privatization Agency was issued ceasing the transfer of the company, claiming the Mekanisa plant should not be returned to Berhane, and mentioned the plant is the only company which has the nature of monopoly. Regarding the Sebeta plant, the letter stated that the property was not Berhane’s from the beginning.

During his exile in the United States, the Company was put up for sale to be privatized in the same year along with other 41 companies.

In the same year, Edward Royce the chairman of the Sub-committee of Africa in the United States Congress and co-author of the African Growth and Opportunity Act (AGOA), with five other congress members wrote several letters to the government requesting the settlement of the case of NALF, which is claimed by the compliant for the returnee of his former properties.

In 2004, Berhane returned to the country and started demanding the return of the companies again by writing letters to the Ministry of Industry, Ministry of Finance & Economic Development, Privatization Agency and the Ministry of Foreign Affairs. But different letters from these government bodies upheld the decision of rejection of the companies’ return.

The recent letter from Berhane was sent to the MoPE on March 1, 2017, claiming the government has to handover the company along with the revenue it gained during the past 19 years while it has been administering, calculated with international standards.

The Ministry again wrote him a letter back with the same explanation as the previous letters, rejecting the restitution of the companies and offering him compensation.

“I did not take the case to the court. Any decision passed by the Agency’s board is a final decision according to the proclamation which established the agency,” Berhane told Fortune.

According to Berhane, he exhaustively tried every chance to get back his companies but has exhausted them all.

“My next step is to take the case to court in the United States,” said Berhane.

“We have made the right decision and he can now take the case in whatever direction he believes viable,” Tesfa Tola, director of legal services at the Ministry told Fortune.


Published on Apr 14,2017 [ Vol 17 ,No 884]



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