Capital Ethiopia Newspaper

Holland Car requests PM’s intervention

One of the two founders of car assembler Holland Car Plc, which is under liquidation, is asking the Prime Minister to intervene in the company’s corruption case.

Tadesse Tessema (Eng.), flew to Addis Ababa from his base in Rotterdam, Netherlands early this week, to file a claim with Prime Minister Hailemariam Dessalegn. He sent a copy of his letter to other government agencies responsible for investigating corruption cases.

In a copy of the letter, which Capital obtained, he alleged that actions taken by the Liquidity Supervision Commission of Holland Car Plc, which was appointed by the court, are illegal.

He explained that the Commission, led by Assefa Ali, is inappropriately using its power.

“They have transferred Holland Car to a company called Axis International Plc to commence the assembling,” the letter reads.

It went on to say that the commission illegally transferred a proposal submitted by the shareholders early in 2015 to revamp the company and have it begin assembling cars.

The shareholders argued that Axis does not have any experience in assembling cars, and that there are a lot of companies based in Ethiopia better able to handle the job.

He allegedly has written evidence that the commission and the company are planning on spending a lot of money to attract  engineers from China: “they are communicating with a Chinese company to get experts from abroad, which is very expensive for Holland Car and the country.”

“It is to use experts that cost a large amount of hard currency, when there are many well qualified people with assembly experience in Ethiopia. We have proposed assembling the cars under the management of the commission at our own expense,” Tadesse argued.

He also believes that an inexperienced car assembly company may build unsafe cars.

Tadesse also accused the commission of weak management. He claimed that the company’s assets have been robbed and spare parts were not taxed when they were imported during the assembly process. He also accused the Liquidity Supervision Commission of being unable to handle court cases, pointing to the controversy between Zemen Bank and the company’s court case regarding the 22 million birr bank claim, which the shareholders oppose but the bank has already secured by selling a company called Cassiopeia Car Plc owned by the shareholders.

In his letter copied to Getachew Ambaye, Attorney General, Federal Police, and Ambassador Teshome Toga, Ethiopian Ambassador to EU and Benelux Baltic States, Tadesse begged the government to be involved in the issue and stop the commission’s corruption case.

Assefa Ali head of the Liquidity Supervision Commission declined to comment on the issue. Capital’s effort to meet the owner of Axis was unfruitful as his cell phone was not working.

Holland Car, which is the first private car assembly in the country, 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, equally contributed by both shareholders to supply assembled vehicles to local and export markets. The company had 250 employees. During the ten years it was active in business, Holland Car was known for its Abay, Tekeze, Naomi and Awash automobile brands.

Last year the two founders said the company would settle all claims from creditors and clients within a year but they needed six million birr to begin assembling cars, which they said could be injected from the shareholders. However, their idea was rejected.

The commission tried to sell the company via auction on two different occasions, but no one has expressed interest.

Holland Car was closed down in late 2012 after it declared bankruptcy due to lack of finance.