News: International Regulators Probe Real Estate Tycoon Ermias Amelga Over Unapproved Security Sales
The Ethiopian Capital Market Authority (ECMA) has officially announced that prominent businessman Ermias Amelga and his company, Genesis Investment Services PLC, are being investigated for reportedly engaging in fundraising activities without proper authorization through security offerings. This information was disclosed in an extensive public statement released on Wednesday.
The regulatory body stated that ECMA, formed through Proclamation No. 1248/2021, has been tasked with overseeing the smooth, equitable, and clear functioning of Ethiopia’s developing securities market. The notification also underscored the Authority’s dedication to safeguarding investors and ensuring adherence to capital market rules.
The statement indicates that Mr. Ermias Amelga and a firm called Genesis Investment Services PLC are among those being investigated. These inquiries are carried out adhering to the constitutional principle of 'the right to be heard,' as stated in the FDRE Constitution.
The directive underscores that public offerings or advertisements of securities cannot occur without obtaining pre-approval as per Public Offering and Trading Directive No. 1030/2024. Additionally, entities are required to finalize their official commercial registrations prior to submitting an application for a capital market service provider license.
To bolster enforcement efforts, ECMA announced the creation of a specialized law enforcement task force in partnership with the Ministry of Trade and Regional Integration, Financial Intelligence Services, Ministry of Justice, and the Federal Police Commission. This collaborative effort was officially documented through a memorandum of understanding signed on February 29, 2024.
"We urge the public to verify with ECMA whether individuals and organizations claiming to be licensed... are indeed licensed by the Authority before engaging with them and making payments."
The Authority is also calling on the public to report any individuals or companies offering unlicensed capital market services.
Ermias Amelga has had multiple encounters with law enforcement previously and was dealing with charges of corruptions In the event brought forward by state prosecutors in January 2019, Ermias, who founded the struggling Access Real Estate S.C., faced accusations from prosecutors for allegedly selling the Imperial Hotel—a property formerly co-owned with him and other stakeholders—at a valuation of 75 million birr. The authorities claimed this figure represented an “artificially inflated” amount, leading to these charges against him. were terminated a year later.
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