ህወሃት ኢፈርትን በአክሲዮን ስም ለትግራይ ህዝብ ለመስጠት ታዋቂ የህግ ባለሙያተኞችን ስታማክር እንደነበር ምስጥራዊ ማስረጃ ወጣ

ከቅርብ ግዜ ወደህ በኢትዮጵያ የተነሳውን ህዝባው ተቃውሞ ተከትሎና የህወሃት የተዳከመ በመምጣቱ እንዲሁም የኢትዮጵያ ህዝብ ኢፈርት ከኢትዮጵያ ህዝብ የተዘረፈ ንብረት በመሆኑ መወረስ አለበት እያለ በመጠየቅ ላይ ነው። ህወሃትም ይህን የህዝብ ጥያቄ በመፍራት ይመስላል ኢፈርትን በአክስዮን ስም ለትግራይ ህዝብ ለመሸጠ በማሰብ ታዋቂ የሆኑ የህግ ባለሙያዎችን ሲያማክር ከቆየ በኋላ አሁን ኢፈርትን ለመሸጥ ወስኗል።

ቅዳሜ ሰኔ 7 2010 ዓም/June 16 2018/ በአዲስ አበባ ሀርመኒ ሆቴል የትግራይ ፖለቲከኞችና ምሁራን ባካሄዱበት ውይይት የተገኙት ዶ/ር ደብረ ፂዮን ኤፈርት አክሲዮኖችን ለህዝብ መሸጥ እንደሚጀምር አስታውቀዋል። ድርጅቱም በባለሙያወች መመራት እንደሚጀምር ሊቀመንበሩ  ዶ/ር ደብረ ፂዮን ተናግረዋል።

የኢትዮጵያ ህዝብ ኢፈረትን በሚመለከት እየጠየቀው ያለው

ኢፈረት በጠራራ ፀሀይ ከኢትዮጵያ ሕዝብ የተዘረፈ ንብረት ነው! መመለስ አለበት!

ከኢትዮጵያ ሕዝብ ሰባራ ሰንጣራ ተዘርፎ የተመሰረተ ስለመሆኑ ራሳቸው “ካሳ ነው” እያሉ ሲዘርፉም ተናግረዋል! ለምን ትዘርፉናላችሁ ሲባሉ “የደም ካሳ ነው”!

1ኛ ከኢትዮጵያ ሕዝብ በጠራራ ፀሀይ የተዘረፈ ነው

ህወሃት ኢፈርትን ለመሸጥ ሁለት ታዋቂ የህግ ባለሙያተኞችን ሲያምክርበት የነበረው ምስጥራዊ መረጃ ከዚህ በታች ቀርበዋ። ሁለቱ የህግ ባለሙታተኞች ከህግ አንጻር ህወሃት ኢፈርትን በአክስዮን ለመሸጥ ለጠየቀው ጥያቄ የሰጡትን መልስ ከዚህ በታይ ያንብቡ፡፡

(ህወሃት ኢፈረትን ለትግራይ ህዝብ ለመሸጥ ያማከራቸው የህግ በለሙያተኞች ከህግ አኳያ የሰጡት አስተያየት PDF)

 

REPLIES TO THE QUESTIONNAIRE

1. Do you think EFFORT is a public owned firm? If yes, how? If not why not?

I do not think EFFORT is a public owned firm (IPO) in its true legal sense. As the name signifies, EFFORT is established as an endowment to fulfil the needs and aspirations of the constituency and the country at large. Although it is not owned by a specific group of identifiable individuals, the founding and the current members can assume a degree of accountability in the name of the ultimate beneficiaries.

EFFORT does not have a registered member with allocated share and a return on its investment. The membership is not designed to provide monetary return to the members. For those reasons I do not think EFFORT is an IPO

2. What are the benefits of EFFORT moving into becoming a Public Owned Firm (IPO)?

i. Those who subscribe for membership/share of the IPO will contribute towards the funding of the investment. This will bring significant sums and will assist expansion of operation without the need for finance from lending institutions.

ii. The IPO will give a sense of ownership, interest and responsibility to the members/shareholders

iii. The IPO will strengthen duty and accountability on the management

iv. It will encourage efficiency and performance.

v. New ideas, radical shakeups will emerge

vi. It will lead to greater expansion of investment and the need to increase revenue and reduce waste.

vii. It will attract the public at large to be engaged in the operation of EFFORT, as this will be the safest vehicle for investment.

viii. It will give tangible income and revenue to the family household

ix. It will encourage mass organisations such as women’s association, youth associations, and indigenous co-operatives to release their resources. In doing so these mass organisations will generate income to support public services and the community.

x. Employees will be encouraged to invest in the IPO. This will give them a sense of belongingness and ownership. In time of need or retirements, their investment will give them financial security

xi. It will clear ambiguity as to the ownership of EFFORT and will answer criticisms and unwarranted comments about the status of EFFORT in the Ethiopian economy

xii. It will encourage other similar endowments to experiment the benefits of IPO

3. What are the challenges for EFFORT to become a Public Owned Firm?

i. EFFORT will have to obtain the consent of the current members and the constituency at large

ii. As it is common to resist radical changes, EFFORT will have to put a strong case for IPO in order to persuade member’s to accept this transformation.

iii. EFFORT must consider the mammoth task of undertaking an overall restructure of the investment group.

iv. In order to achieve efficiency a great deal of waste will have to be controlled and this may cause some degree of hostility and resistance within the established system

v. To maximise revenue, EFFORT may have to shift some of its operations to more profitable projects as opposed to socially beneficial activities, this will go contrary to the ideal and objectives of its establishment.

vi. EFFORT will have to reconsider the quality and efficiency of the management structure. To achieve this EFFORT will have to take actions to bring in highly skilled and efficient workforce at significant costs

vii. The management will be under pressure to show success in the investment.

viii. EFFORT will face stiffer scrutiny by IPO members/shareholders

ix. IPO will create a great deal of paperwork and compliance vis-a-vis its shareholders and members.

x. EFFORT will not enjoy the benefits granted by law in respect of its status as an endowment

xi. There is also a challenge as to who would be the shareholder of the assets currently held by EFFORT and how this can be disposed of

4. What are the Regulatory challenges in moving EFFORT to become Public Owned Firm (IPO) and how can you align the IPO to legal compliance in the context of Ethiopia?

I am versed on international business and commercial law. I would not be in a position to analyse the impact in the context of Ethiopian law. Given sufficient time, I would be happy to carry out legal research in the area

5. What are the ways to protect EFFORT to stay to its initial mission as in transform itself to become a Public Owned Firm?

i. The documents that would establish the IPO should state that the ultimate objective of the IPO is to alleviate poverty and to play a greater economic role in the manufacturing and import substitution sector and the expansion of trade and investment within the country

ii. Detailed procedures and structures should be set up to achieve the stated mission

iii. Orientation and guidance needs to be given to the management and staff at all level

iv. Acquisition of a greater portion of the share shall stay within mass organisations

v. Membership and share allocation should be offered to those with limited income

vi. Employees should be encouraged and given priority along with mass organisation to acquire share or membership of IPO at a reasonable rate

vii. Established government institutions, corporations and similar endowment institutions throughout the country shall be the main investors in the IPO

Kind regards, Melaku Getachew

 

—

ከዚህ በታች ያለው ደግሞ ሌላው የህግ ባለሙያ ኢፈርትን ወደ ግል ንብረት ለማዞር ህወህት ለጠየቃቸው ጥያቄዎች ከህግ አኳያ የሰጠውን አስተያት ነው፡፡

—-

Questions:

1. Do you think EFFORT is a public owned firm? If yes, how? If not, why not?

We need to distinguish between EFFORT proper and the businesses in its portfolio. EFFORT as an entity is a charitable endowment.  The business entities in its portfolio are, in the sense of the Charities & Societies Proclamation, assets belonging to the charitable society, namely EFFORT.  Therefore, the income generated from the businesses as well as the proceeds from their transfer or liquidation need to pass the test of the Proclamation. This understanding can be obtained from the reading of the provisions concerning income generating activities . In fact, what EFFORT has in the various income-generating businesses are stakes, and the profits therefore should be strictly used in the same way the charitable entity were earning profits by directly engaging in a permissible profit generating business. Therefore, the various PLCs in which EFFORT ultimately is a shareholder, directly or indirectly, can be said to be owned in the same way EFFORT, as a not-for-profit entity has its tangible and intangible assets. And they can be disposed the same way EFFORT can dispose what it has physically as a charitable assets .  But if the PLCs are converted into publicly traded companies, then EFFORT as a charitable endowment can still continue to have shares in the various companies with benefits to dispose them at any time it wishes.

Converting the existing PLCs into share companies is an easy task. What will follow after the conversion of the companies into share companies is what really matters. When the owner of the shares of the companies, EFFORT, converts them from PLCs to share companies, EFFORT still owns the shares in a more handy way, in a way that can be freely transferred if it so wishes. Converting the PLCs into share companies may be followed by offering shares of the companies for the public, which may take either of two forms.

1.    EFFORT may offer shares it owns in the companies in order to reduce its shareholding and ultimately disposing them all,  or alternatively,

2.    Cause the issuance of new shares for public offering with intent to make the companies largely available to the public, thereby raising additional investment to expand and reach more goals and objectives.

The proceeds of the shares transferred to members of the public through disposition shall be treated as assets of the charitable endowment and have to be used strictly in the sense that funds and property owned by a charitable endowment have to be used. The proceeds may be used to create other income generating activities or to fund charitable purposes directly. Either way, the funds are charitable funds and treated as such for all legal and practical purposes.

2. What are the benefits of EFFORT moving into becoming a Public Owned Firm (IPO)?

If the decision is made to have EFFORT-owned companies be transferred to the public, it should be done through a formal, official and transparent Initial Public Offering (IPO) process.  Our opinion is also that the time has come for such an exercise. We will state the reasons:

1.    The new ownership structure, as a publicly owned share companies, will make faster growth more conducive, unlocking the value of the individual subsidiary companies much easier by making them stand-alone share companies owned by the public.
2.    As publicly owned companies they benefit their owners with dividends and upward movement of stock prices.
3.    Such an ownership structure engenders a sense of ownership by the stockholders
4.    It fosters direct accountability on the management and the board of directors
5.    It involves the stockholders directly in the decision making process in setting the direction of each subsidiary company
6.    It relieves the current directors of the burdens that they have in managing multiple responsibilities

7.    In a situation where EFFORT does not want to be part owner of any of the business, it will have the right to withdraw investments as it deems wise and reinvest proceeds elsewhere. This choice is not available for EFFORT in the current ownership structure.

3. What are the challenges for effort to become a Public Owned Firm?

Although in the strictest sense, it is a matter of policy and can be determined by the leadership and not a matter of public opinion, we must consider the historical, practical and emotional aspects of such a decision.

Therefore, there will be several challenges in making such a decision:

1.    There is a strong belief that EFFORT is owned by the people. When its companies are made publicly-traded shared companies only a certain percentage of the population is able to buy the shares. Unless there is some mechanism to handle this issue, shares will only be purchased by those who can afford to buy them. Therefore, those who cannot afford to buy the shares may feel that they are no longer owners.  This feeling of non-ownership may create negative sentiments by those who do not own the shares.  Another more serious concern is that when a company is traded publicly, a few shareholders may be able to afford to buy a majority of the shares, taking control of the company.  Although this issue can be handled initially by the founding shareholders by limiting the number of shares one legal person can buy or by setting percentage shareholding limits. Such limitations can later be changed when blocks of shareholders are able to change the Articles and Memorandum of Association raising the concerns stated above.

2.    As EFFORT was being managed for the public’s benefit over the years, the new direction will strictly focus the firm on maximizing shareholder profits.  This would create an issue whereby directions will be dictated by the new shareholders (even if all the new shareholders are from among the intended beneficiaries at the start of EFFORT.

4. What are the Regulatory challenges in moving EFFORT to move to become Public Owned Firm (IPO)? and how can you align the IPO to legal compliance in the context of Ethiopia?

As we have opined earlier, we have to distinguish EFFORT- the charitable endowment – and the various companies in which it directly and indirectly owns stakes. Technically and legally, EFFORT is a charitable endowment and is different from the various businesses it is associated with in the eyes of the public. EFFORT can continue to be a charitable endowment without the need to control and manage companies running business. If the all PLCs are converted into share companies owned by the public through public offering of shares, there may not be a need for EFFORT as charitable endowment to worry about day-to-day direct management and control as it is done in its current format. It may simply be represented in the company as shareholder and/or in the board of directors, if elected. We see little regulatory challenges to converting EFFORT-owned businesses into companies which are available to the public at large.
We believe that this exercise does not have the aim of doing away with EFFORT. It may be necessary to redefine its purpose, reconfigure how it works as a charitable endowment and align its objectives and goals along with other similarly-purposed charitable entities.

The regulatory challenges

5. What are the ways to protect EFFORT to stay to its initial mission as in transform it to become a Public Owned Firm?

First, convert the subsidiary companies (PLCs) into Share Companies. With EFFORT as existing shareholder, in its various direct indirect forms and crossholdings, it can float shares in some of the Share Companies where there could be public interest to acquire. As long as we have proper ownership and management control in the companies converted to public ownership to have them perform optimally, EFFORT will continue to have dividends from the shares it owns to use for its purpose as a charitable endowment fund. One of the ways endowment funds use their initial funds continuously is through wise investment in independently and professionally managed companies who can make reasonable profits at reasonably acceptable risks. EFFORT will also have the freedom to adjust its ownership shares more freely to invest available proceeds elsewhere that it would deem provide a better return on investment.

Second, reorganize the charitable endowment into an exclusively not-for profit platform dealing with only how to deploy the available resource for charitable purposes and other activities that would increase the asset base of the endowment. For EFFORT to continue with its initial mission, it must create an endowment fund that will run in perpetuity.  The way to do this is to only spend the interest generated from this fund on charitable activities so that the main cash asset of the endowment keeps growing for generations while serving the initial mission of the endowment.

The new share company set up will also reduce the financial risk of EFFORT by diversifying the ownership of the subsidiaries.  In the current setup if a company goes bankrupt, EFFORT can be in financial difficulty.

============