Tiss Abay is owned by Abebaw Desta and Menweyelet Atnafu, among the founders of Star Business Group. The two also own Mina Trading Plc, whose building was held as collateral in the overdraft loan contract with Abyssinia.
It was stated in the suit that there were three separate overdraft loan contracts with a total value of 21.5 million Br concluded between Abyssinia Bank and Tiss Abay Plc on September 3, 1998, November 3, 1999 and October 24, 2000. The contracts also stipulated an 11pc interest rate and a three per cent penalty if the debtor failed to meet the payment obligations.
The defendant is said to have paid 16 million Br. The defendant argued that it was willing to pay the 4.5 million Br it said it still owed. Despite that, however, Abyssinia Bank filed a suit on October 30, 2009, at the Federal High Court Eighth Civil Bench, because it said the defendant failed to respond to a written notice given to it on July 26, 2007. The defendant owed it about 5.39 million Br in principal and interest, Abyssinia said.
The bank's prior attempt to retrieve its money by foreclosing on the collateral failed because the same building, which had been collateral for another loan taken from the CBE, had already been sold by the latter.
Tiss Abay had claimed that it had faithfully been paying the 11pc interest for 10 years, which alone amounted to nearly 23 million Br. It also requested the appointment of an independent auditor to certify the accuracy of the plaintiff's claim.
The defendant owed the plaintiff about 4.56 million Br of the original debt plus about 1.56 million Br in interest up to October 31, 2009, the day after the charge was filed, the court appointed auditor said accordingly.
This sum, which the court accepted, was more than 730,000 Br in excess of the plaintiff's claim.
The court took the auditor's figure and ordered Tiss Abay to pay about 6.12 million Br for the period until October 31. A three per cent fine and 11pc interest will continue to be added to what Tiss Abay owes until a complete payment is made.
Abyssinia is relying on finding properties owned by the defendant to foreclose.
"We will search for the properties of the company to get our money back," Negatu Tesfaye, legal counsellor to Abyssinia Bank, told Fortune.
Abyssinia Bank has already won similar court cases against another company owned by Abebaw and Menweyelet, Tana Trasnport Plc, while it still has another case pending against Mina Trading Plc at the Ninth Civil Bench of the Federal High Court.
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