A new external audit finds that 65 billion birr vanished without a trace over the span of a decade at the former Metals and Engineering Corporation (MetEC).
The federal government has written off the losses from the state-owned enterprise’s balance sheets.
The Audit Service Corporation, a state-owned enterprise (SOE) in charge of auditing other SOEs, discovered the huge sum went missing in the ten years following MetEC’s establishment in 2009.
The funds in question were withdrawn with no accounting, and registered as losses. The money was then embezzled through a variety of schemes, according to the Audit Corporation.
Its executives reported their findings to senior government officials in recent weeks. The matter was quickly brought to the attention of the Ethio-Engineering Group (EEG), formerly known as MetEC.
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“We requested that the losses be written off,” said Ambassador Suleiman Dedefo, CEO of EEG.
The federal government has acquiesced to the request.
The embezzled funds were divided up among the former managers of MetEC and their associates, according to the CEO.
“That money could have built another GERD,” he said.
MetEC was established during the EPRDF era and was run by military officials. The Corporation was the recipient of numerous direct awards for national mega-projects, all of which have failed.
MetEC was also wallowing in huge debt before the Liability and Asset Management Corporation (LAMC) was set up to absorb SOE debts in 2021.
Following the political shift in 2018, MetEC was split into a commercial and military wing. The former is now called the Ethio-Engineering Group.
“We are still analyzing the finances and properties embezzled under the former leadership,” said the Ambassador.
The recent audit found five property deeds under MetEC’s name, all of which are sitting idle. The plan is to auction off the properties and forward the proceedings to EEG, according to Suleiman.
“Embezzlement practices from the former days continue in various ways today,” Suleiman told The Reporter.
Eight individuals were recently apprehended on accusations of theft at a power equipment factory run by the Ethio-Engineering Group.
The Ambassador blames the prevalence of corrupt practices for the heavy losses the Group has incurred in recent years.
Former MetEC leaders remain under police custody. Last week, the Federal High Court found Major General Kinfe Dagnew (former MetEC director) guilty on corruption charges relating to the procurement of radar equipment.
The Audit Service Corporation is conducting the second half of its MetEC audit, analyzing the books between 2019 and the present.
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