Tikur Abay Construction SC, Ethiopia has been dissolved for persistent failure to turn a profit. Tikur Abay has incurred significant debt Wegagen Bank and the Commercial Bank of Ethiopia which are in the process of being called in as well as running at a loss for several years according to sources.
The decision to dissolve the state owned enterprise supported by government subsidies was reached by the Privatization and Public Enterprises Supervising Agency of Ethiopia six weeks ago.
The final audit of the company will be performed by The Public Enterprises Trustee Board with the board of directors and the management instructed to supply all necessary information to the auditing body in line with Public Enterprises Proclamation No. 25/1992.The PTBE was also charged with terminating the contract of employees and to oversee the payment of benefits and compensation with the exception of the property and liquidation departments due to the significant role they will play for the auditing process.
The decision to dissolve the company was contested by the Labor Union which claimed that it is unfair to terminate thousands of employees while the government is attempting to support citizens through various mechanisms including micro-financing.
Efforts should be made to appoint efficient management to rescue the company and to protect the rights of the workers according to the collective agreement of the union and the labor laws of the nation proposed the Union.
The reasoning behind the dissolution which claimed that the company had consumed 75% of its capital is unacceptable as its based on faulty calculations claimed a letter issued by the company’s employees requesting the government to reconsider the decision for dissolution.
Source: The Reporter
