Holland Car, Zemen Bank scuffling again

0
177

Tadesse Tessema (Eng), general manager and shareholder of Holland Car, which is currently under liquidation, filed a claim to the 5th commercial bench of Federal First Instance Court of Lideta Division to reverse the verdict made in favor of Zemen Bank last month.
In December 2014, Zemen Bank sued the Liquidity Supervision Commission of Holland Car Plc (HC) for 22 million birr. The amount represented debt that Holland Car owed the bank based on loans it received on August 22, 2011 and April 12, 2012.
In its claim, the bank explained that even though it only provided 11 million birr in the stated period, the car assembler did not settle any payments or interest until it declared bankruptcy two and half years ago. On the other hand, the commission contested the claim, arguing that the bank should not receive further payments from the  bankrupt company.
On June 17, 2015 the court made a final decision in favor of Zemen Bank, entitling it to 11 million birr in loan repayments. However, the court verdict did not extend the additional 11 million birr to the bank.
According to Tadesse, who filed the new claim on Monday July 13, the bank should not expect to receive a share of the company’s sales and assets.
He argued that the bank has already secured the amount that Holland Car owed in principals and interests.
The general manager’s claim indicated that the bank has sold Cassiopeia Car plc, the collateral pledged by Holland Car, to settle the loan.
Tadesse said that the bank wrote a letter to Cassiopeia’s lawyer in April 2014 indicating that it sold Cassiopeia in March 2013 for 22 million birr to settle the loan. Cassiopeia, located in Burayu, 15km west of Addis Ababa, is also engaged in the car assembly business.
Tadesse’s claim indicates that the bank is demanding additional repayments, despite reportedly obtaining the loan amount it requested a year ago.
He urged the court to reverse the June 17 verdict.
Tadesse is one of the two HC shareholders, owning half of the company’s shares. HC, located in Mojo, 75km east of Addis Ababa, closed about two and a half years ago after declaring bankruptcy.
The court had suspended an auction previously announced for May 15 after Tadesse, who returned to Ethiopia on May 12, filed an appeal against the auction.
Following the auction’s suspension, the owner had been lobbying stakeholders and car buyers to support the recovery plan of the business.
However, Tadesse’s efforts to convince the stakeholders, especially the 115 car buyers, were unfruitful.
Tadesse had submitted a recovery proposal to the Liquidity Supervision Commission with hopes to revive the company. He was simultaneously discussing the proposal with the Ethiopian Embassy in Brussels, Belgium and had sent a letter to the prime minister’s office.
On Wednesday July 8, the Federal High Court Lideta Civil Bench instructed the liquidity commission to proceed with foreclosure.
Tadesse had stayed in the Netherlands until receiving legal impunity from the Ministry of Justice to return to the country in order to settle the problems that forced the pioneer car assembler out of business.
The other main shareholder, Trento BV, has acknowledged that the company has an outstanding debt of 97 million birr, consisting of 10 million birr in taxes, 31 million birr in loans from Zemen Bank, and 22 million birr in advance payments from customers. The total asset value of HC at the time of inspection by the liquidity commission was nearly 160 million birr.
Holland Car was established in 2005 through a joint venture between Tadesse Tessema and Trento Engineering, a Dutch company, with an initial capital of 11 million birr shared equally by both shareholders. 
During its ten years of active business, Holland Car made a name for its Abay, Tekeze, Naomi and Awash automobile brands.