Money Markets
Atlas CEO Carl Esprey when the firm listed at the NSE in 2014. PHOTO | FILE
By OTIATO GUGUYU
Ethiopia has seized cash from the account of Nairobi Securities Exchange (NSE) cross-listed Atlas Ltd over a tax dispute.
The firm, originally listed at the London Stock Exchange,
has lost Sh241 million ($2.4 million) deposited by its subsidiary TEAP
Glass PLC.
Atlas said the tax bill by the Ethiopian Revenue
and Customs Authority (ERCA) is from a claim against Ardan Risk &
Support Services which it acquired three years ago.
In an update sent to the NSE Atlas said it had been
advised in Addis Ababa that neither it nor TEAP has any tax liability
under the Ethiopian law.
“The company has been advised by its local team in
Addis Ababa that on May 10, 2016 ERCA summarily removed approximately
$2.4 million from TEAP’s bank account with the Development Bank of
Ethiopia,” the statement read.
Atlas, which only recently announced it was
investing in the Ethiopian glass-making factory, says it will ensure the
funds are returned since the unilateral removal of the funds was
unlawful and in breach of an agreement reached with ERCA.
It has promised to exert diplomatic and political pressure on Ethiopia to return the cash.
“The board assures shareholders that it will take
all available steps to ensure that the company’s funds are returned and
the board is currently exploring legal, diplomatic and political routes
in order to seek redress,” the statement read.
The logistics firm took up stake in Ardan Risk
& Support Services (ARSS) in 2013, which it used to acquire Ardan
Logistics Kenya (ALK), a separate holding company to run the business.
However late last year, Atlas discontinued
operations of its Kenyan subsidiaries (ALK, Ardan (Civil Engineering)
Ltd and Ardan (Medical Services) due to a tough operating environment.
“The downturn in the oil and gas industry, market
adjustments and the failure of certain key clients to settle debts,
together with increasing creditor pressure has led to the decision to
close its Kenyan operations,” the firm says in its financial statement.
The company suffered a Sh1 billion loss in June due
to reduced contracts from oil and gas exploration companies especially
around Turkana and made a decision to divert its resources from Kenya to
Tanzania and Ethiopia
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