A five-year legal battle ended with the eighth criminal bench at Lideta High Court passing a final ruling on the eight defendants who have been indicted under the Yesu PLC court case on Tuesday March, 21, 2017. The defendants were charged with dogging hundreds of millions of birr. The case revolved around income and value added tax evasion, money laundering as well as making misleading statements on income tax and value added tax.
The bench ordered the defendants to pay 1.4 million birr and serve jail time.
It is to be recalled that the same bench passed a final verdict on January 26, 2017 stating that major shareholder of Yesu PLC, Yohannes Sisay, was found not guilty of charges of prevaricating income of half a billion birr. Along with Yonannes, his family member, who were co-defendants were also found not guilty.
However, the bench found Yesu PLC, its manager, Issayas Teklu, Shebel PLC and its manager Hailu Assefa guilty of similar charges of evading tax.
Established back in the early 1990s, Yesu was involved in producing steel sheet whereas Shebel, which was founded back in 1996, used to produce reinforcement bars. The two companies established a business relation where Yesu sells manufactured materials to Shebel; similarly the later pass it to a third company called Lemon PLC after adding values. During the court proceeding, the prosecutor identified Lemon as a ghost company, established to evade tax.
The second co- defendant, Yohannes was accused of supplying steel to Shebel on credit and at lower prices than the production cost with the intent of evading taxes.
Prosecutors also claim that Yesu accrued unpaid corporate income taxes of 81.5 million birr for the period between 2007 and 2010, and 123.8 million birr in unpaid VAT, for the period from 2004 to 2010. Yohannes was personally accused of having 83 million birr of unpaid income tax and 283 million birr of unpaid VAT.
Yohannes was accused of allegedly reporting reduced manufacturing figures on behalf of Yesu. The company’s reports states that it had manufactured 286 pieces of corrugated iron from a single sheet of galvanized iron while the actual production was 372 sheets. He allegedly sold 86 of the corrugated steel sheets and transferred the revenue to his own account, as well as using it to upgrade Yesu’s capital.
He was allegedly said to have collected around 44 million birr.
However, the court later found Yohannes, together with the aforementioned co-defendants, not guilty. His charge was then dropped where as he paid almost half a billion birr of income, value added tax and a fine.
Yesu and its manager were found guilty of similar counts. In this respect the bench presided by Judge Nuredin Kedir in its ruling on March 22, 2017 ordered Yesu to pay 250,000 birr and Issayas to pay 130,000 birr and serve seven years of jail time.
By the same token, Shebel, which was charged with evading 36 million birr of income tax and 372 million birr VAT, was ordered to pay 670,000 birr whereas Hailu was ordered to pay 370,000 birr and serve 16 years of jail time.
The court passes the guilty verdict as well as penalty on Hailu in his absence.