Judges at the Federal High Court granted police an additional 14-day custody to continue their investigation of alleged corruption against Kinfe Dagnew (Maj. Gen), former head of the state-owned military-industrial complex, Metals & Engineering Corporation (MetEC).
The three-panel judges of the 10th Criminal Bench of Lideta Division accepted the request of investigators, who claimed that they needed more time to compile documents and witness testimonies to press charges against Kinfe. During the latest session held on Thursday, the judges also denied bail rights to Kinfe.
Arrested on November 14, 2018, Kinfe was brought in front of the Court the next day along with his brother Essayas Dagnew, former chief operating officer of Ethio telecom. During their first appearance, the brothers appealed for public defence, which was granted by the Court. In later proceedings, the judges revoked their plea for public defence after the police presented documentary evidence showing the financial capacity of the suspected.
During the November 19, 2018, session, Kinfe and Essayas requested bail through their lawyer, but the panel denied the request and adjourned the case to Monday, December 3, 2018.
Last Monday investigators presented a multi-page preliminary claim with 12 counts of allegations against Kinfe and one count against Essayas. Police claimed that Kinfe allegedly approved the procurements of various items made by the Corporation without proper and legal public bidding processes.
The preliminary claims brought against Kinfe include the procurement of machinery for a naphtha purifying subsidiary from Alphakat KDV, a German company, for eight million euros, which the Corporation settled for 4.8 million euros; and a procurement for the same project where Kinfe allegedly approved a 347.9 million Br contract to hire Ev-GTDC Waste to Energy LLC without a proper bidding process, claim police.
Another accusation leveled against Kinfe is the procurement of 20 double-cab pickup trucks from Equatorial Business Group for 22 million Br. The vehicles were procured by negotiation without following proper procedures, according to police. Kinfe also allegedly ordered and approved the purchase of 10 used aircraft from Gunner for 9.5 million euros; one aircraft from Tecnam Aircraft for 615,197 dollars; four aircraft from Yun Vich Company; and 24 Mig 23 jet fighters for 1.2 million dollars from a Bulgarian company to be used as scrap metal.
Procurement of Rivera Hotel and a plastic factory from Alem Fitsum, managing director of Alemgenet Steel Factory, for 128 million Br is another claim brought against Kinfe. Under Kinfe’s direct order, the Corporation paid off a 67.8-million-Br bank loan and interest fee tied to the properties and the additional 15 million Br capital gains tax that should have been settled by the seller, Alem, according to police.
“The initial agreement between the two parties states that the properties cover a total of 11,000Sqm, but in fact they rest on 6,941Sqm,” reads the police filing.
Police also accuse Kinfe of allegedly approving the procurement of Imperial Hotel for 72 million Br and a four-storey building for 12.7 million Br from Ermias T. Amelga and Getahun Beshah of Getfam Plc, respectively.
Kinfe is also suspected of ordering the purchase of four residential homes at various locations and owned by different people for nearly 52 million Br.
Initial grubbing and clearing work done at the site of the Great Ethiopian Renaissance Dam (GERD) is another accusation of Police. MetEC took the project from Ethiopian Electric Power for 2.1 billion Br and outsourced the project to sub-contractors without a proper bidding process. In addition, the Corporation made full payments to sub-contractors before the projects were finalised and delivered, according to police.
Sponsorship, overseas travel and medical coverage are other sections of counts included in police allegations. Abera Entertainment Centre Plc, Fitsum Yishitila, a staffer at the state broadcaster, Zinahbizu Tsegaye, an exiled actor, and Tesfahun Sebsibe are persons listed who allegedly received sponsorship payments from MetEC under the direct order of Kinfe, according to the filing. Police also claim that the Corporation covered medical treatment amounting to 105,000 dollars for two non-staff members of the Corporation.
The case of the two shipping vessels MetEC procured from the Ethiopian Shipping & Logistics Services Enterprise is also included in the accusation. Police allege that Kinfe was supposedly involved in the decision authorizing 544 million Br to repair the vessels and to launch them as transport ships. After the renovation work was completed, the vessels were put into service and generated 29 million dollars in revenue. The money was never deposited into the Corporation’s account, according to police.
Construction machinery procurement valued at 10.6 million dollars from a Chinese company, Rockon; 30 procurement agreements valued at one billion dollars, of which Kinfe approved half the contracts; 4.45 million euros in procurements for used cranes from an Italian company, Techno Trading; and the purchase of other new and used cranes from a German company valued at 6.6 million euros are additional allegations police brought against Kinfe.
Essayas is suspected by police of allegedly amending project contracts for mobile and CDMA network site construction in Somali Regional State and Bale Zone in favour of MetEC. The initial cost of the project was 204.9 million Br but was later amended to 322.6 million Br with the approval of Essayas, who was director of Ethio Telecom’s NGPO Program, claims police. Essayas is also suspected of awarding MetEC a tower construction project valued at 321.7 million Br.
Police listed that they gathered testimonies from 53 witnesses and collected contracts, payment receipts and different documents to support their claims and requested additional days for further investigation. The investigators have also requested that the Court deny bail to the suspects, stating that they could flee, destroy documentary evidence and threaten witnesses if they are released on bail.
Defence lawyers for the brothers, Zeresenay Misgina and Habtom Tesfaye, requested the court grant bail for their clients, asserting that they pose no threat to the investigation process. Zeresenay also explained to the court that the two are suspected of an economic crime that can be easily identified from the documentation, which can be collected from the government offices.
The lawyers argued that police accusations lack clarity and the brothers’ cases should be separated, since the allegations brought against them are different. The lawyers also claim that police have sufficient time to investigate the case and that the court should reject the police’s request for continued custody to conduct its investigations.
After hearing arguments from both sides, the three judges – Christian Baylegne, Lemma Tuji and Genanaw Assefa – denied bail and granted police a continuation of 14-day custody for Kinfe and a 10-day custody extension for Essayas.
In a separate case, the same court is reviewing the cases of 26 other officials of MetEC who are suspected of grand corruption involving 37 billion Br in public procurements.
Alem Fitsum, who is suspected of selling the hotel and plastic factory to MetEC at an overvalued price, has appeared before the same court last week. Police have secured a 14-day extension to continue their investigation of Alem.
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