Ethiopia: Access real estate home buyers meet with MoT to seek justice

By Muluken Yewondwossen, Capital Ethiopia An impromptu meeting between people representing home buyers defrauded by Access Real Estate and the Minister of Trade, Bekele Bulado (PhD), has resulted in an agreement to meet again this Wednesday, January 10, to move their case forward and come up with a solution,according to sources who attended the meeting.
Representatives of people who purchased homes from Access Real Estate took their concerns to the Ministry of Trade (MoT) because they felt their issues were still unresolved despite a five year struggle and the formation of several committees.
Forty three people representing home buyers at 19 sites went to the Minister’s office unannounced on Friday, January 5, and told Capital they successfully met with Bekele and explained their concerns.
“The Minister has talked with a few representatives of the committee,” they said. “We have expressed our concerns to the Minister about the delayed decision,” a source who attended the meeting told Capital.
“The expected audit report which is crucial for developing a solution was conducted by the state owned auditing firm and submitted to MoT several months ago, but we have not gotten a solution yet,” they claimed.
“We believe that MoT is responsible for finding a way out to of the home buyers’ dilemma because this is what the PM’s office has mandated. However, no resolution has occurred,” they said.
The audit report did lead to the formation of a special association but that has not been finalized.
The PM’s office and Mayor of Addis Ababa ordered the relevant city bureau to undertake the process. “This is the problem of MoT because it is the higher body assigned by the PM to conclude the case,” the home buyers stated.
They said that two years ago government officials promised the entire 2,500 home buyers at a meeting held at a Kebele hall at Bole Sub city that the problem will be solved within three months but the case is still unsettled.
The home buyers and shareholders of Access have been also looking for a legal solution based on the audit report.
According to that report, Access has transferred over a quarter billion birr to related parties or companies. Seven partners have gotten loans amounting to nearly 146 million birr from the real estate company, according to the report. From this amount, Access Capital Service received the lion’s share followed by Pacific Link Ethiopia, Pioneer Agro Industry, Meri Real Estate and Mechot Real Estate. Access Capital was formed and lead by ErmiasAmelega, who is a major shareholder and founder of the company and Access Real Estate, received a loan of close to 131 million birr and four other companies secured from 43 million to 22 million birr respectively.
The audit report carried out by the Audit Services Corporation and submitted to the Ministry of Trade on April 7, 2017 indicated that the company had collected 1.3 billion birr. The major share or 1.16 billion birr came from home buyers, according to the independent audit report which also indicated that the company made an initial payment of over 178 million birr to six contractors.
From the stated payments 135 million birr went to a single contractor called Living Steel Construction and 26 million birr went to Yibel Industrial, according to the audit report that Capital obtained.
It added that the company has settled a payment with several individuals, but did not say why. According to the audit report, Access Real Estate has paid 59 million birr to Ermias, founder, board chairman and the first CEO of the company.
Other prominent business individuals and organization leaders were also paid. Generally the company has forked over about 125.4 million birr to these individuals.
The audit report indicated that the company has spent 272 million birr to procure assets. The other major expense in the audit report was constructing homes and shops at the Gabi Investment site, amounting to 194 million birr. The report also listed 130.4 million birr in additional expenses.
No one who gave Access money for a home actually received one, which caused chaos and led the government to become involved in the case to settle the matter. It has now been five years since the controversy first erupted and the founder left the country.
The government formed a special committee to settle the problem a few years ago. It was formed via an order signed by Debebe Abera, minister of the office of the Prime Minister, to Mekuria Haile, who at the time was Minister of Urban Development, Housing and Construction, in June 2014 telling Mekuria to form a main committee chaired by Mekuria and a technical committee comprised of nine members including home buyers to come up with a solution. Two years after it was formed a report was sent to the Prime Minister.
The main committee came up with several solutions. It said a legal association for home buyers should be established and a special audit undertaken by the state owned Audit Service Corporation; securing lands belonging to the company and prosecuting those who broke the law.
The committee also said the company should be dissolved and transferred to the home buyers.
In the three and half years since the main committee was formed through the decision of the PM’s office several letters and other forms of communication occurred between the Ministry of Urban Development and Housing, Ministry of Trade and several offices of the Addis Ababa City Administration with the goal of securing the plots that were managed by Access, to form a legal association for home buyers and to give a final solution to the case.
However, the formation of the legal association has been delayed for years, forcing the Prime Minister’s Office to give an executive order to DiribaKuma, Mayor of Addis Ababa, to precede the formation of a special association for home buyers, according to a letter signed by Debebe that Capital obtained.
A few weeks ago, the home buyers committee wrote a letter for the second time within a few months asking to meet with the PM. In their letter they complained that even though the main committee was formed by executive order of the PM and some actions were taken, the 2,500 home buyers have not gotten any solution. They begged the PM to meet with them to explain their problems.
The joint letter signed by Mebrat Woldetensai, board chair of Access Real Estate, and AklogSeyum, chair of the main committee for the home buyers that was issued in early November 2017 asked the Attorney General about how the legal process was going since they had requested that Access Real Estate be held accountable for their actions.
A 1,500 page document was also transferred to the Office of the Attorney General, according to the information that Capital obtained from sources.