Ermias under arrest, yet no solution for homebuyers

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In yet another dramatic twist of a tiring and drawn-outscandal, lasting over four years, Ermias T Amelga, Access Real Estate’s founder and first CEO and board chairman was arrested following an intensive period of meeting with shareholders and homeowners. The main committee chaired by Mekuria Haile, Minister of Urban Development and Housing, and other top government officials including from the Federal Police met with shareholders and the frustrated homebuyers on two separate meetings held on Monday January 11.
At the meeting that held at the Ministry of Trade hall with ARE shareholders, the board delivered its report for the year 2015, including concern about Access’ founder and first CEO and board chairman, Ermias Amelga.
The report focused mainly on disagreements and challenges between the Board of Directors and Ermias, who joined the board directly upon his return from self- exile in February, and chaired it for few months.
The board claimed that the former head of the company, who admits to being a major actor in the real-estate company’s failure, was unable to come up with the solutions he promised he’d deliver on upon his return from Dubai.
Ermias’ plan was to change tactics including adding foreign companies as shareholders and contracting foreign companies for construction and management of real estate. There was talk of contractors and real estate developers that expressed interest in the company; and promises that Access’ 300 million birr currently held by third parties would be collected.
However, neither of the above mentioned materialized, no companies emerged as interested and collection of money from third parties did not occur as per the schedule. The board, now chaired by Mebrat Woldetinsay reports that Ermias has not shown interest to bring representatives of interested companies for discussions with the board.
On his report, Nuredin Ahmed, General Manager of ALLE and advisor to the Minister of Trade and Chairman of the technical committee formed under the main committee, disclosed that working relations among actors were not ideal, and there was tendency to work individually rather than working with the board.“Ermias even signed letters without the awareness of the board,” Nuredin added.
Nuredin and Assefa Biyou, Federal Police Commission Commissioner, who attended the meeting with shareholders, said that there were illegal activities observed in the company. Nuredin stated that they have tipped the Federal Ethics and Anti Corruption Commission on such activities, mainly in relation with illegal banking activity between Ermias and Tibebu Alemu and deals on one of the ARE plots that located in Lycee Guebremariam.
Following continued speculation the technical committee then decided to call upon the Federal Police to inspect the company, on October 2015. The Police Commissioner confirmed incidents of rent seeking, corruption and illegal banking as crimes in the company. However, the Commissioner later clarified that what they would conduct “was just an inspection, not a direct investigation”.
Chairman of the main committee, Mekuria, was clear in stating that most of ARE’s activities over the last few years lacked a legal framework. He gave shareholders two options: to be part of the house ownership scheme with homebuyers or to come up with the finances to enable to recommence construction.
At the meeting on Monday, Ermias presented his concern to shareholders and homeowners stating that the board has been a hindrance to his efforts to resurrect of the company’s activities.
“The board has not been supportive, instead they have blocked activities that would have enabled the company to re-commence construction,” he argued.
It was a day after this meeting that Ermias was arrested under the custody of Federal Police and appeared at Arada First Instant Court. The court has allowed the police to detain Ermias for ten additional days as they conduct further investigation.