Pursuant to a law suit filed on June 5 by Michael Kassa Gebru, one of the parties in Land and Sea Development Ethiopia Plc. over ownership dispute, the Federal High Court on Monday ordered an injunction barring the sale and transfer of 1,097,101 shares in Land and Sea Development Ethiopia Plc. upon verification that the they are registered under Land and Sea Development Limited – a company based in Isle of Man in England.
The feud went public when representatives of Land and Sea Development Limited in Ethiopia posted an announcement on a newspaper that Michael did not represent the company and that he was using the company’s seal illegally.
Michael is now petitioning the court to annul the share sales agreement between him and Land and Sea Development Limited, and rule that he is the owner of the shares in Land and Sea Development Ethiopia Plc which are the subject of the agreement, or he be paid by Land and Sea Development Limited, the sum at which the shares were sold.
Michael had filed the suit against both the London-and the Addis Ababa-based companies.
The court dismissed the suit against Land and Sea Development Ethiopia Plc., on the ground that the sale by share holders of shares in a company having its own legal personality can not entail liability for the company.
Michael and his two American partners, Jay Nijjer and Dr. Bruce Fischer claim that the British company was playing foul in an effort to “steal” their company Land and Sea Development Ethiopia Plc.
Two years after they co-founded Land and Sea Development Ethiopia Ltd. in Washington DC., Michael and his partners, in December 2006, made contacts with the RAB Capital Hedge Fund Group, where another incubation company, Ten 3, agreed to facilitate a loan for the establishment of a bamboo factory in Assosa, in the Benishangul Gumuz Regional State.
The arrangement, according to Michael is that a partner company – Land and Sea Development Ltd – was established in Isle of Man.
Land and Sea Development Ethiopia Ltd then transferred 45 percent of its share to Land and Sea Development Ltd for 10,000,000 dollars, 10 percent to Ten3, and retained 45 percent of the shares.
On May 19, 2006, Bruce Edward Fischer, Michael Kassa Gebru, and Jay Nijjer incorporated Land and Sea Development Ethiopia Plc in Ethiopia, each with a share of 1 million birr.
In December that year, documents show that the three agreed to sell 3,192,301 shares to Land and Sea Development Ltd which was represented by Dr. E. Bruce Fischer.
Mohandas Krishna and his partner, Kamal Patel on the other hand claim that Michael and his colleagues have transferred all their shares to the holding company Land and Sea Development Limited in return for minority shares.
The dispute even gets more complicated in that Michael claims that Patel and Krishna are bidding to buy Land and Sea Development Ethiopia Plc, from the London company.
Michael is opposed to this on grounds that he says he has not sold his shares and that the London company can not provide evidence other wise. “I have not sold them my share and if they can provide proof attesting I have done so, I am willing to pack my things and leave this country today,” he said.
“It is true that the company [Land and Sea Development Ethiopia Limited] was established in 2004 by Michael Gebru, Jay Nijjer and Bruce Fischer in Washington. But when they went into agreement with Land and Sea Development Ltd in the UK in 2006, it was under the arrangement that they sell hundred percent of their shares in return for a minority share in the UK holding company which is Land and Sea Development Ltd. We have documents to prove that,” Patel told The Reporter last month.
The Ethiopian Investment Agency had dismissed a complaint that was lodged by Michael and his partners saying their claim was unacceptable on legal basis.
“We have rejected their claims on a legal basis… As far as the legal side of the issue is concerned, the shareholders of the company are Land and Sea Development Ltd and Cavendish Trust Limited. Mr. Patel and Krishna are employees of these shareholders. What ever internal arrangement there is in these companies does not concern us. We know they are operating legally and that the investment is being conducted according to their agreement with the government,” Negussie Gurmu, Director of Investment and Facilitation and Aftercare Department had told The Reporter then.
Judge Dereje Iticha on Monday, in a letter copied to the Investment Agency, ordered that Land and Sea Development Limited, be notified of the charges filed against it and respond by July 28.
Krishna, one of the managers hired by the London company to run Land and Sea Development Ethiopia Plc. told The Reporter that their company had no worries if such a suit had been filed.
The case was adjourned for August 4, for oral defense.
By Namrud Berhane | (Reporter)
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