Sugar company forced to liquidate as gov’t spends millions on import

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Minalachew Simachew

ESAT News (July 6, 2016)

Cronies and multi-million dollar companies with connections to the regime in Ethiopia allegedly forced the liquidation of what could be a self-sufficient sugar company for the country’s growing need for the sweet commodity.

In an exclusive interview with ESAT, former manager of the Hiber Sugar Factory S.C., Minalachew Simachew gave detailed account of how individuals and companies connected to the corrupt government coerced the company to liquidation and sent two of the managers to exile.

Minalachew said the land that was allocated for them for sugar plantation was given to a foreign investor after they had sold a considerable amount of shares to local investors. He said at one point they were forced to work on a land given to a Brazilian investor free of lease payment; but things fell apart after the land was ready for plantation as the Brazilian could not pay his share of the payment to the sugar company.

He said they finally secured a land in the Amhara region on a 40 year lease at a cost of 110 million birr (5.5 million USD) with 3.3 million birr upfront payment. However some individuals implanted by the regime as shareholders and a local police commander demanded the liquidation of the company. The police commander for the Lideta district, Mekonnen Demissie, who had a 1 million birr share (50,000 USD) illegally instructed the freezing of the company’s bank account without the knowledge and backing of the Ministry of Industry as required by law.

Although a court in Addis Ababa ruled that the bank accounts to be reactivated in favor of the company, authorities rounded up all board members of Hiber Sugar Factory S.C. and detain them at the Central Investigation Bureau falsely accusing them of establishing a share company without first securing the land for sugar plantation. The seven board members were later released on bail.

Minalachew also said METEC, an engineering manufacturing company run by the ruling TPLF requested to build the sugar factory and a member of the TPLF by the name Woldemekel Woldemariam demanded a commission payment of 7.5 million birr for brokering the deal with METEC.

When things became too much and unbearable for the leaders of the company, Minalachew and his predecessor, Amare Legesse have left the country and are now in the United States.

Heber Sugar Factory S.C. is now under the control of METEC, which has been under fire for wasting nearly 4 billion dollars of the Ethiopian Sugar Corporation as it failed to complete the building of a number of sugar factories planned by the Corporation.

Local media reported the country is now importing sugar worth 4 million dollars from India and that will only last for few months.