Turkish company loses legal challenge over Ethiopian factories


The Privatization and Public Enterprise Supervising Agency (PPESA) won an arbitration battle with the Turkish based Narin Orme Textile Group over the Arba Minch Textile Factory.
The Turkish company leased the Hawassa Textile Factory and Arba Minch Textile SC in 2005 for five years.
The PPESA cancelled the deal after three years, due to a disagreement with the company.
The agency claimed it was owed money by Narin Orme, dating back to the termination of the agreement in 2009.
According to Wendafrash Assefa, public relations head of PPESA, the company refused to settle its debt with the agency.
He told Capital that the case was settled in arbitration court, without the company or its officials present. He claimed they have left Ethiopia.
Wendafrash did not reveal the amount the company was ordered to pay the PPESA.
Sources have told Capital the court ordered the company to pay more than 50 million birr to the agency in order to settle the debt and compensation.
He said the PPESA will pursue the claim through the Ministry of Foreign Affairs to secure the amount it is owed, because Narim Orme has no presence in Ethiopia.
The Turkish company has also been involved in a dispute over compensation allegedly owed to employees.
Arba Minch Textile was established in 1991 as a supplier to the Hawassa Textile Factory. It was leased to Narim Orme Textile Group on a five-year-agreement, but this was terminated and the factory was put under PPESSA supervision.
Hawassa Textile Factory was also leased by Narim Orme Textile Group in 2005. That agreement was cancelled in 2008, after it had amassed huge debts under the management of the Turkish company.
Hawassa, established 20 years ago with 112 million birr in capital, was returned to PPESA control in 2009.
Arba Minch Textiles was briefly known as Addis Izmir Share Company, after it was taken over in 2000 by Turkish businessman Akila Yilbrin. He gave up control of the factory a little more than a year later, at which point it had debts of more than 25 million birr.
The factory also lost 20 machines to fire in June 2001.
The factory’s alleged registered debt grew to 44 million birr after Narin Orme gave it up in 2009.