It plans to rent commercial spaces despite legal restrictions
The plan is under review by Investment Commission
East Steel Plc, the Chinese company that bought Edna Mall at over three times the bid’s floor price, has revealed plans to rent out the once-famous entertainment venue near Bole Medhanialem Church. With a one-week notice for former tenants to remove their properties, the company has since sealed off the premises.
Posted on April 4, 2022, the notice speaks of the takeover of the building that has remained idle for close to a year. East Steel is intent on doing up the building and repurposing it as a modern mall, according to the notice.
The Chinese firm has meanwhile called on interested lessees to bid for space and move in once renovation work is completed.
East Steel, a subsidiary of a Chinese firm, founded in 2012 in the Eastern Industry Zone, in Dukem town of Oromia region, 35 km south of Addis Ababa, acquired Edna Mall from CBE in July 2021 for 810 million birr.
Tekleberhan Ambaye Construction Plc (TACON) had taken out loans from CBE using the mall as collateral. Opening its gates in November 2008 as an entertainment venue, the building used to house such establishments as Matti Cinema, Bob and Bongo’s Fun Palace.
For businesses previously situated in Edna Mall, reclaiming their old spots is crucial to holding on to their customer base.
According to Michael Teshome, a legal expert, Ethiopia’s investment law proscribes foreign investors from engaging in retail activities such as renting shops unless a special agreement is concluded. According to the 2020 Investment Proclamation, the investment board has the authority to revise the list of specified investment areas, as needed.
In addition, the board may decide, in consultation with relevant public and private sector stakeholders, to open to foreign investors investment areas previously reserved for joint ventures with the government, domestic investors, or joint undertakings between domestic/foreign investors. However, such decisions must be justified by public interest considerations.
Asked by The Reporter, Yu Jun, general manager of East Steel, Plc, if there was any agreement reached with the government on proceeding with renting Edna Mall as a shopping center, he replied, “No comment.”
Temesgen Tilahun, deputy commissioner of the Ethiopian Investment Commission (EIC), stated that because the issue is new to the commission, a team of experts is studying it.
“This case is still under review, we can’t reveal any information now,” the official added.
Michael argued that the acquisition of Edna Mall by the Chinese company cannot take place without the knowledge of EIC.
“There might be a bilateral investment treaty or a special agreement between the Ethiopian and Chinese governments,” he said.