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St Yared Hospital shareholders spar over audit

Shareholders of one of the city’s prominent hospitals, Saint Yared, are going through a dispute.
The private health facility formed about 13 years ago went from being a clinic to a high level hospital when it was initially formed by two shareholders.
Then a few years ago a third shareholder joined the ownership.
Now 56 percent of the hospital is owned by Akeze Teame (MD), 36 percent is owned by Sisay Shimeles and 10 percent by Getahun Yitbarek (MD).
Sisay, one of the two founding shareholders, told Capital that initially the facility was run without any disagreement. He said that mistrust occurred when the major shareholder established another health centre separately. There was a conflict of interest because the other facility took business from Yared.
He claimed that the hospital operation has been dominated by relatives of the major shareholder. “The major disagreement erupted when we asked the company to be audited because we were concerned after we did not receive a dividend disbursement.”
Then the two shareholders insisted on undertaking an auditing, but the major shareholder rejected the idea.
“When I insisted on auditing and sending the report to the Ethiopian Revenue and Customs Authority (ERCA) the management of the hospital reported to ERCA, which conducted an audit for a limited period,” he said.
“The finding of ERCA indicated that the facility did not settle about 12 million birr in taxes during the auditing period, but since the company willingly reported the case to ERCA the amount was reduced to 8 million birr and we are paying that now,” Sisay said.
According to the shareholders the audit of ERCA did not cover the entire period since the hospital was formed in 2008.  It covered from 2012 so we want to see the audit report for the previous period, because we suspect that there was mismanagement during that time.
When he rejected being audited, Dr Getahun, the minor shareholder that joined the group in 2015, filed the case to the court. He claimed he should not have to pay the accrued tax because he was not part of the shareholders. Instead he argues that the auditing should go back to the time the hospital was established.
“When we tried to solve our problem amicably, Dr Akeze insisted we buy his share without audit or valuation,” the shareholder said.
They claimed that they have already filed their criminal and civil claims to Police this week.
A few weeks ago Capital reported that employees of St Yared were worried that they could lose their livelihoods due to an enduring disagreement between the hospital’s shareholders.
According to employees Capital spoke with, the hospital is considered by many to be one of the best health facilities in town but morale among staff has been low since shareholders have been unable to reach a common consensus over a dispute between management and the financial administration.
Capital has attempted to get a comment from the major shareholder, Dr Akeze, but he refused to respond to repeated phone calls. He did respond to a text saying that the dispute between the three partners is being handled by lawyers and the courts.


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