The Board of Directors of Access Real Estate (ARE) has voted to remove the recently appointed Chairman, Ermias Aemelga, on Friday August 7.
The technical committee formed to supervise the company’s activities during its probation period also referred Ermias’ case to the main committee for further action on Friday August 14.
The government had established a committee about a year ago to solve disagreements between Access Real Estate shareholders and home buyers. A technical committee that reports to the main committee supervises Access’s operations, in this period.
The company has been paddling in turmoil for the past three years, since the real estate developer was unable to deliver finished homes to its clients. Ermias, the founder, first CEO and Board Chairman of Access Real Estate, was appointed as chairman five months ago upon return from his self imposed exile. The main reason for his appointment was to salvage Access from turmoil.
Sources told Capital that the seven-member board removed Ermias from his position post two weeks ago with advice from the technical committee, who determined that he was unable to work harmoniously with the Board of Directors.
According to sources, reaching consensus on issues became an impossible matter between the chair and the board. “It is the main reason for his dismissal in addition to his failure to keep his word,” sources said.
On July 14, the home buyers committee, which has representation within the technical committee, had articulated its dissatisfaction with the company’s stabilization efforts to the Ministry of Justice, the responsible body that gave immunity to Ermias. The home buyers committee said that it did not see any progress in the stabilization efforts since Ermias’ appointment.
Ermias returned to the country to restore order to the company which has been stuck in limbo since he fled the country.
“Even though Ermias returned to the country with immunity to do what is fair for all involved, and with the support of foreign financers, there are still no tangible improvements,” the home buyers committee retorted in a memorandum written to the technical committee.
Sources said that the technical committee, chaired by Nuredin Mohamed, advisor at the Ministry of Trade (MoT), passed the expulsion decision on Friday, August 14 after it evaluated the home buyers and board members’ claims.
The technical committee has stated that it is difficult to tell if Ermias is acting on his promise and if the path back to normalcy for Access Real Estate will ever be reached.
The technical committee is responsible for monitoring activities of the company and reporting on its performance to the main committee, chaired by Mekuria Haile, Minister of Urban Development, Housing and Construction (MUDHCo) and vice chaired by Kebede Chane. Addis Ababa City Administration, Federal Police and representatives from different ministries are also present in the steering committee.
The technical committee, which pulls together key figures from eight ministries and Addis Ababa City Administration, has recently broadened its scope and intends to deal with similar problems across other companies, once done with Access Real Estate.
The main committee was established on July 2, 2014, to identify and resolve the logger head the real estate company is in.
The former CEO of the company, Ermias, returned to the country following lengthy negotiations which saw him granted immunity by the government.
Over 2,000 homebuyers purchased houses from Access with some having made advance payments in full, but the developer did deliver a single house to those buyers over the past six years.
Following the company’s near collapse, 80 litigations remain pending.
The court has given its final verdict to some home buyers who pressed charges. It has been decided that these clients should be given ownership of incomplete buildings, previously owned by Access Real Estate. However, this ruling falls short of addressing all claimants’ concerns, as other stakeholders (such as home buyers who argued they have a stake in the entire properties of the real estate and land owners who transferred their plots to Access under some deals) also raised claims on the half-completed buildings based on the court’s decision.
Access is incorporated by 651 shareholders with the majority of buying into the company after its formation.
Capital’s efforts to get further detail of events from the technical committee were unfruitful, as Nuredin declined to comment.
The Ministry of Urban Development, Housing, and Construction (MUDHCo) had previously prepared a Point of Reference to audit Access Real Estate S.C.
MUDHCo oversees the developer’s financial records to straighten out snags and resolve squabbling with home buyers and shareholders. The ministry had said that the audit would start shortly after the particulars were fully enumerated.
The audit was expected to bring light and transparency to the investigation, and to allow for remedial measures to be taken, in case irregularities are uncovered in Access Real Estate’s financial records.
Last month, Kassahun Goffa, Public Relation Head of MUDHCo, told Capital that the audit would start shortly. “The audit might look delayed but the technical committee had taken enough time to carefully prepare the document. We are almost through with the preparation, and Audit Service Corporation, the firm appointed, will carry out the task according to the instructions we have prepared,’’ he added.
Demsash Getachew, General Manager of Audit Service Corporation, an organization under the Federal Auditor General, also said that two months had passed since they received a letter from Federal Auditor General, notifying them to audit Access Real Estate.
Demsash said, the General Auditor wrote the letter to the Audit Service Corporation to investigate Access’ financial health based on the company’s internal regulations. However, the corporation is awaiting a green light from MUDHCo to hand them a point of reference.