Friday, June 14, 2024
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Court freezes BGI’s assets amidst dispute over headquarters sale

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By Eyasu Zekarias

The ongoing dispute between Purpose Black Ethiopia and BGI Ethiopia, a major alcoholic beverages producer, has taken a legal turn as the court approves a motion to freeze BGI’s assets, including bank accounts and immovable properties.

The conflict stems from the termination of a contract for the sale of BGI’s head office building, a negotiation that had been ongoing for the past eight months. Purpose Black Ethiopia, along with BGI, was involved in the negotiations, but disagreements ultimately led to the deal’s collapse.

On March 7, 2024, Purpose Black Ethiopia successfully petitioned the court to block BGI Ethiopia from accessing its assets and bank accounts, alleging potential embezzlement. The motion was granted, with the ban set to remain in place until March 26, 2024.

Wubishet Demese, CEO of Habesha Legal Firm and external legal advisor to Purpose Black, confirmed the court’s decision, highlighting the urgency to prevent financial misconduct amid the ongoing dispute.

The dispute traces back to a bid won by Purpose Black Ethiopia in July 2023, securing the purchase of BGI’s headquarters for five billion Birr. However, negotiations faltered, leading to the termination of the sales contract on March 4, 2024, citing a lack of commitment from Purpose Black Ethiopia.

In response, Purpose Black Ethiopia refuted the termination, asserting that BGI failed to fulfill necessary requirements for the contract’s completion. Ermias Birhanu, senior legal advisor to Purpose Black Ethiopia, emphasized their readiness to fulfill financial obligations once the contract terms were met.

Meanwhile, BGI contended that Purpose Black Ethiopia lacked the financial capacity to execute the transaction, leading to doubts about their ability to meet payment obligations. Nega Mihrete, BGI’s legal advisor, outlined the challenges in reaching a consensus and defended BGI’s decision to terminate the agreement.

The legal standoff culminated in court intervention, with the freeze on BGI’s assets pending further resolution. The court’s decision follows a petition filed by Purpose Black Ethiopia, which claimed to have paid a substantial sum towards the purchase, urging protection against potential financial losses.

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