Prosecutors brought two additional but separate corruption charges against Kinfe Dagnew (Maj. Gen), former head of the Metals & Engineering Corporation (MetEC), last week.
The latest charges were filed against 22 other co-defendants and Kinfe, raising the total number of charges against Kinfe to three. The new allegations are on the illegal procurements of two shipping vessels, two hotels and a plastics factory that brought the loss value of the accusations to 747 million Br.
In their charge, the prosecutors alleged Kinfe ordered and approved the procurements illegally without proper bidding processes with the intent to gain undue advantage, contravening his duties and abusing his powers.
A week ahead of the new charges, Kinfe and seven other co-defendants were charged for allegedly making improper procurements for tractors and spare parts valued at 6.5 billion Br. The prosecutors claim that the tractors were procured for Adama Agricultural Machinery Industry without following proper procurement procedures.
One of the latest charges was filed on January 14, 2019, at the Federal High Court 15th Criminal Bench involving three counts and 14 defendants. Four former deputy CEOs of MetEC – Tena Kurundi (Bir Gen), Mulu WoldeGebriael (Col), Berhe Wolde-Michael (Col) and Tekeste Hailemariam (Col) – are included in the charge.
The defendants are charged with causing 544.7 million Br worth of losses in the procurement and mismanagement of Abay Wenze and Abiyot, two shipping vessels procured from the Ethiopian Shipping & Logistics Enterprise.
According to the charges, the Corporation acquired the vessels to be used as scrap metal for 60.7 million Br in 2012. However, MetEC renovated them and placed them in commercial service for five years, in violation of the Corporation’s mandate, according to the prosecutors.
It is alleged that MetEC invested 544.7 million Br in the vessels and then outsourced them to different foreign companies that mismanaged them, according to the second count of the charge.
The third count is related to the 2017 illegal sale of the two ships to Apex International Shipping LLC, a Dubai-based company, without a proper bidding process.
The three judges – Bula Wagari, Anteneh Getachew and Seifu Kebede – adjourned the case to January 25, 2019, to receive the statements of defence.
A day after the first charge was filed, the prosecutors brought another two charges against Kinfe and 11 defendants. The filings that a no-bid contract valued at 200 million Br was executed for Rivera and Imperial hotels and a plastics factory. According to the charges these three entities were purchased without a proper bidding process, planning and market analysis.
Procurement of the Rivera Hotel and PVC Profile Factory from Alem Fistum, managing director of Alem Genet Steel Factory, for 128 million Br in 2012 is the first count in the second charge. Prosecutors allege that Kinfe, Alem and the other co-defendants improperly caused the Corporation to pay capital gains tax for the properties, while the seller should have been the proper party to pay the taxes.
“To inflate the price, they also exaggerated the land size of the two properties,” reads the charge. “The actual size of land is 6,941Sqm, but the agreement says 11,000Sqm.”
After the procurement of the two properties, the Corporation lost 415 million Br, as both entities have stopped operations after they were handed over to MetEC, claim the prosecutors.
The second count relates to the procurement of the Imperial Hotel from Ermias Amelga, who was then the general manager of Access Real Estate. The charge state that the hotel was procured without a bidding process for 72 million Br, while its actual value was 51 million Br.
On the same morning before the charge was filed, Ermias, who was emotional, angry and sobbing at times, stated that his company bought the hotel for 60 million Br. Ermias also said that his detainment over the issue was not proper, stating that he only owns five percent of the shares in Access Real Estate. He also said he would not personally be liable for the issue.
After the charge was filed in the afternoon, Ermias and two other defendants requested bail rights, which was denied by the court. The judges also adjourned the case to January 28, 2019, to hear statements of defence.
During the latest session, judge Anteneh recused himself from the case, stating that he has a close relationship with Zeresenay Misgina, one of Kinfe’s lawyers.
Last week four former MetEC executives out of the 28 who were initially arrested faced charges at the 15th Criminal Bench of Lideta Division in relation to the procurement of spare parts and inputs for Homicho Ammunition Engineering Industry, a MetEC subsidiary.
Since the end of last week, prosecutors have charged 31 individuals, 23 of which are from MetEC, and 9 are still at large.
On the same week, judges of the 10th Criminal Bench granted bail to Essayas Dagnew, former chief operating officer of Ethio telecom and brother of Kinfe. The judges imposed 100,000 Br in bail after pointing out that the police have failed to show progress on their evidence gathering and investigations.
Essayas is suspected of amending project contracts for mobile and CDMA network sites in Somali and Oromia regional states, and a tower construction project valued at 312.7 million Br in favour of MetEC.
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