They engaged in investment activity not allowed for foreign investors; no business licence, no work permits, no VAT.
The Lideta Federal High Court criminal bench tried 17 criminal suspects, comprising three foreign companies, one Ethiopian company and their employees over a business tax fraud worth around one billion Birr.
The charge was filed by the federal public prosecutor on September 9, 2014 and the Court heard the testimony of the public prosecutor’s witness on March 13, 2015.
The accused were two United Arab Emirates (UAE) registered companies, namely, Dubai Auto Gallery L.L.C and Auto World International Free Zone Plc along with one Ethiopian company called Okapi Impex Plc. Five Sri Lankan and four Indian employees were convicted with the remaining suspects being from New Zealand and the United Arab Emirates.
They were charged with engaging in an investment activity that was not allowed for foreign investors. They were importing the small, three-wheeled vehicle known as Bajaj using the Ethiopian company as cover, without having a business license in Ethiopia. Some of the employees used false employment contracts of Okapi Impex Plc and the others were in the country on tourist visas making them ineligible for employment and rendering their trading as a criminal act, the charge stated.
Using such cover, they had been engaged from June 12, 2012, to September 29, 2013, in importing, wholesaling and retailing of Bajajs produced by their employer companies in the UAE. They were also found conducting a market survey for selling the product of the companies in different regions of the country.
Ashref Awel, owner of Okapi Impex Plc, was accused of giving cover to the 14 defendants by pretending that they were his employees when he knew that they were employees of the two foreign companies that had no licence to engage in that type of business in Ethiopia.
The three companies were also accused of hiding money amounting to 520 million Br in the bank account of the wife of Ashref, without paying business tax for two years.
Okapi Impex Plc is a private company that started its business operation in October 2011 having its fixed establishment in Addis Ababa, Ethiopia. The company has been principally involved in the import and distribution business of various goods.
The most serious charge involving the largest sum was tax fraud allegedly committed by an Indian suspect named Vishal Kumar, owner and general manager of Asia Afro Automobiles Plc, a Bajaj manufacturing and assembly company. The company went bankrupt on February 28, 2000. He was engaged on wholesaling and retailing of the vehicles in Ethiopia without having licence. He earned 350.8 million Br from his illegal business without paying value added tax (VAT), the charge claimed.
The defendants objected to the accusation, saying that the public prosecutor had no constitutional grounds for accusing them because his charge did not fulfill the legality requirement of the criminal law. They said that conducting a market survey was nowhere specified as crime and the employment contract could not be deemed false as it was only obligatory among the contracting parties.
They defended that as long as the third suspect Okapi Impex Plc had a business licence, employees were not obliged by law to have an exclusive business licence in their names. The suspects objected to their joint trial and asked the Court for a separate trial. They asked the Court to set them free from the accusation and alternatively to order the public prosecutor amend his accusations noting that the charged filed against them did not fulfill the legal requirements. The Court ordered the presentation of additional witnesses in the next trial.