Another real-estate controversy
Home buyers despair over threat of losing properties bought from O-Logo real-estate
Fearing foreclosure on properties they bought as far back as 14 year ago, dozens of people, clients of O–LOGO PLC, a real-estate company owned by an Ethiopian-Italian, are in desperate mode and are asking for government intervention as the company that sold them their properties lost a court battle at the Civil Bench of the Federal High Court, Lideta Division on Thursday, where it tried to transfer some of its debts to a new sister company, O-LOGO Construction.
This happened as the company and its owner, Leonardo (Leo) Sibona faces a number of lawsuits, including from clients, companies, former lawyers, government agencies such as the Tigray Regional Health Bureau and Nib Insurance Company in courts all over the country. The company had attempted to save the properties in question from being auctioned off to pay some bank debts. Its last ditch effort to shield his properties under a new sister company, O-LOGO Construction, in what said to be a pyramid like scheme, failed miserably on Thursday, putting his real estate buyers at risk.
The Reporter has learnt that there are many unhappy clients (over 30) who had paid in full for apartment units located near the United Nations Economic Commission for Africa (UNECA), a stone throw away from the Office of the Ethiopian Human Rights Commission. Apparently, title deeds on most of the units are yet be transferred to clients thereby making them, practically, properties of OLOGO PLC. Many of these clients are staff members of UN affiliated organizations, who had borrowed from their place of work to acquire properties.
With debt and much pressure from many, the long-suffering victims fear the owner of the company; might flee the country with no warning, putting their financial investment in danger. To make matters worse, despite selling many units, in all the transactions, the company has not been able to supply VAT receipts to any of its clients.
Best known as Leo, the owner stands accused of being unresponsive to his clients, signing contracts that it has no capacity to complete and collecting funds from clients worth millions with little to show. For instance, with the Tigray Regional Health Bureau, while he collected a large some of funds for a 12-storey building years ago, he has yet to start the construction, propelling the government agency to come after him in court.
The government agency is one of the many who are pursuing Leo.
For instance, a 30-something woman was lured into buying an apartment from the company in 2016. She was a returnee with a young child, with a husband who works for the United Nations and she assumed its prime location and lofty promises was enough to accept what was to her a bargain deal. She liked the location and the promised green space that was rare in the capital.
“I was promised a lot, that a new elevator would be installed, there would be an ample green area for my child to roam around and that all would be completed within a year,” she told The Reporter. “It has been quite the ordeal and not only are we unhappy living in the partially completed building, we are even forced to take dangerous stairs to our fourth floor apartment, since the apartment has no elevators and our safety, the safety of our children is being compromised regularly”.
In fact, The Reporter has learned, there was such an accident a year ago, an accidental death where a resident fell form the fourth floor of the building.
Leo, an Ethiopian born Italian citizen, moved to Ethiopia in 2004, having lived in Rome since childhood. He was ambitious when he moved to Addis Ababa, but had little resources to realize his dreams. In Ethiopia, he saw little constructions and big dreams for himself, having branded a builder of top quality buildings.
When he first moved to the capital, he was at Ghion Hotel. Words of mouth reached many that an Italian was about to build Italian style properties and prime locations and many knocked on his door to sign on. They trusted him, he provided little documentations.
He presented himself as a millionaire who had come back to Ethiopia to help change the nation’s narrative that was due to transition from a shantytown city to a modern capital of a nation that was embracing foreign investment, instead of foreign aid.
This is when Yafet Desta met up with him. He was visiting from Washington DC with a plan to make Ethiopia his permanent home. He found Leo believable.
Leo promised, he would complete the apartment building and that his unit would be handed to him in 18 months; but as the first purchaser of the apartment units, which were partially completed and hardly finding tenants for a fraction of what it would cost to rent such a property, in a prime location of the city.
On top of that, he has not been able to get his ownership transferred to him with documentation. He is an owner in name only. Worse, he now stands to lose his apartment for a debt incurred by Leo.
“We purchased these apartments, hoping it would be an investment, that we were investing in something credible but with little government oversight, among the many who purchased, we have become victims of a scheme,” said Yafet. “We have lost money, energy and we are facing difficulty to rent the properties, as there is no functioning water system, no elevator and we rarely get adequate energy for lightening”.
Clients have had and still are having difficulty reaching Leo to discuss matters with him since he travels abroad too often. Meetings already booked have been pushed repeatedly for future dates.
In the rare meeting that occurred a month ago, he faced many angry clients, accusing him of the marathon of lawsuits and judgments were compromising their properties. He persisted that the affairs of O-Logo PLC would not interfere with that of O-Logo Construction. This as many argued that there would be no way that most banks would have rendered him much freedom to borrow without the real-estate collateral.
With the latest defeat at the Ledeta Court on Thursday, he is scheduled to face many angry and disappointed clients today, at 4 PM. This would be the fourth time in a month, he had scheduled to meet with his clients, and each of the previous times, he was a no show.
The Reporter attempted to reach him as well as the Italian Embassy in Addis Ababa several times for comment, but there was no reply.