The decade-long legal battle involving Addis Ababa’s landmark Imperial Hotel property is set to make a return appearance in the Federal High Court.
The family of the late diplomat Asfaw Tefera is readying to take Access Real Estate and Ermias Amelga to court over the property rights following the failure of negotiations involving the Ethio-Engineering Group (EEG), formerly the Metals and Engineering Corporation (MetEC).
The saga began in 2010 with the sale of the property in the Gerji area to Access Real Estate, represented by then CEO Ermias Amelga, for a little over USD three million.
The original proprietors agreed to a sale involving a series of 16 installments over a one-year period for close to 4,000 square meters of floor space. The total value of the transaction was pegged to the central bank’s USD exchange rate, equaling approximately 47 million birr at the time of sale.
“My father decided to sell the hotel, because we wanted to invest in the agro-industry business using the money,” said Tsegaye Asfaw, one of five inheritors of the Imperial Hotel property.
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Access Real Estate paid USD 1.2 million to the family, before selling the property to MetEC two years after the initial deal, according to Tsegaye.
MetEC reportedly paid 74 million birr in full for the property despite knowing that Access Real Estate did not hold the title deed.
The understanding, according to inside sources, was that Access would use the funds from the sale to settle accounts with the original proprietors and then transfer the deed to MetEC.
However, immediately after MetEC transferred the funds to the real estate firm, the money was cleared out by disgruntled Access Real Estate homebuyers, who themselves filed a separate lawsuit against the troubled developer in 2013.
Nonetheless, the Imperial Hotel property has been occupied by the military corporation since the sale to Access Real Estate, despite it not holding a deed.
Tsegaye claims that former military officers in charge of MetEC, in collaboration with corrupt former Ministry of Revenue officials, attempted to intimidate him into handing over the title deed in the years following their acquisition of the property.
“I refused because the government would lose VAT, capital gains tax and other taxes from the transactions. Since Ermias did not pay me full value, and did not address the tax issues related to the transaction, I could not hand over the title deed,” Tsegaye told The Reporter.
The confusion over the property rights has been exacerbated by the frequent reshuffling at the top management level of the EEG as well as ambiguities relating to the continued existence of Access Real Estate.
But Access Real Estate has reappeared on the radar, well-placed sources informed The Reporter.
Dozens of properties formerly belonging to the developer had been seized and eventually transferred to the government-run Land Bank. Sources report there have recently been transactions involving some of these properties.
In fact, Ermias Amelga is reportedly appointed to Access board recently, in the wake of the drawn-out legal battle with homebuyers.
“The major reason I could not proceed with legal proceedings was because I was under the impression that Access Real Estate no longer exists legally,” said Tsegaye.
Tsegaye and his family have thus decided to file a claim for the USD 2.1 million that remains outstanding from the initial sale in 2010. If the courts rule in their favor, Access Real Estate and Ermias Amelga will be on the line for some 115 million birr at the current exchange rate.
The plaintiff wants to see former Access Real Estate properties sold off to settle the outstanding value.
The officials at EEG are also eager to see the title deed transferred. To them, the Imperial Hotel saga is an unwelcome reminder of the ‘mess’ left behind by former MetEC officials.
A recent audit found that 65 billion birr went missing from the Corporation’s books in the decade following its establishment in 2009.
“EEG officials informed us that we shall go to court. We are preparing to do so,” Tsegaye told The Reporter.
The suit will be filed against Ermias Amelga and Access Real Estate as the Asfaw family had no direct transaction agreements with EEG/MetEC, according to him.
“We have decided the Imperial Hotel case needs to be brought before the courts and the Ministry of Justice,” said Suleiman Dedefo (Amb.), CEO of EEG.
“Since MetEC did not have any direct transactions with the original owners, EEG cannot demand the title deed from them. But the original owners are willing to give us the title deed, as long as the broker settles the outstanding payment in full,” he told The Reporter.
The CEO blames the recklessness of former MetEC officials and Ermias Amelga for the drawn-out confusion over the property. He also claims that MetEC paid USD six million to acquire the property from Access Real Estate.
“The money was embezzled by former MetEC officials and the broker,” said Suleiman.
Ermias Amelga, on his part, says currently he is not aware of any legal proceedings associated with the Imperial Hotel property.
“I know the issue has been hanging for years, but I haven’t heard anything about a claim. If I do, I will respond in the appropriate manner,” he told The Reporter.
Tsegaye and his family also want to see a quick resolution to the case.
“My father died seven years ago without seeing this case put to rest,” he said. “We have to do it this time. We hope the case will finally be put to rest this year.”
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