Ethiopia arrests ex-head of army firm in crackdown on security services

ADDIS ABABA (Reuters) - Ethiopia arrested the former head of a military-run industrial conglomerate on Tuesday and flew him in handcuffs to the capital, state media reported, a day after authorities announced investigations targeting senior members of the security forces.

Kinfe Dagnew, a Brigadier General in Ethiopia’s army and former chief executive of METEC, was taken into custody close to the border with Sudan and Eritrea, state-run broadcaster EBC said.

State media broadcast footage showing Kinfe surrounded by a ring of soldiers and later images of him in handcuffs arriving by military helicopter in the capital later on Tuesday.

A documentary that aired Tuesday evening on state-owned Ethiopian Television (ETV) gave details of widespread alleged embezzlement by METEC.

It said the firm, which was awarded a 24 billion Ethiopian birr ($863 million) contract by the state utility in 2011 to carry out electromechanical works at the Grand Renaissance Dam, had received 16.7 billion birr of the total amount so far but that only 23 percent was completed, at a cost of 9.46 billion.

“Only 266 million birr was found in its bank account. The rest of the money had vanished,” it said.

It also alleged that the firm had taken over two aging ships that belonged to the state maritime agency but that they were used to transport contraband that it said were very likely to have included arms to Somalia and Iran - countries under United Nations arms embargoes.

The documentary claimed properties such as buildings were also purchased illegally by the company, with no records made available.

A day earlier the attorney general announced the arrests of other METEC executives in a corruption investigation and the detention of security officials accused of abusing prisoners - moves that were welcomed by rights groups and a prominent opposition politician.

FILE PHOTO: Ethiopian Prime Minister Abiy Ahmed speaks during a media conference at the Elysee Palace in Paris, France, October 29, 2018. Michel Euler/Pool via REUTERS/File Photo

Amnesty International said the arrests announced on Monday “are an important first step toward ensuring full accountability for the abuses that have dogged the country for several decades”.

One Western envoy, who asked not to be named, described the crackdown as a “full frontal assault on the establishment”.

Kinfe’s arrest was the most high-profile since Prime Minister Abiy Ahmed came to power in April promising to rein in the security services and tackle what he called economic mismanagement, corruption and rights abuses.

He has pushed through reforms that have upended decades-old policies and hierarchies in east Africa’s economic powerhouse - including moves to let private investors get stakes in the huge conglomerates run by the army and other state bodies.

There was no immediate statement from the attorney general on Kinfe’s arrest. The Prime Minister’s office referred Reuters to the attorney general.


On Monday, attorney general Berhanu Tsegaye said investigations had uncovered corruption at METEC (Metal and Engineering Corporation), which makes military equipment and is involved in sectors from agriculture to construction. Reuters has not been able to contact METEC for comment - senior public relations officials were among those arrested.

The attorney general said 27 METEC officials had been detained - alongside 36 intelligence officers, police and other military officials accused of abusing prisoners.

He also accused senior members of the security services of ordering an attack on the prime minister in June.

The detained METEC employees and security officials appeared in court later on Monday. A judge denied the suspects bail and gave police 14 days further to investigate. None were charged.

Opposition politician Berhanu Nega welcomed the development and said the vast majority of Ethiopians were happy with the arrests.

“People believe it is about time such measures are taken to address the issue of justice in the past but also to indicate in the future that these kind of crimes are not acceptable in the future,” he told Reuters.

A list of the arrest warrants released by the attorney general’s office named 27 METEC current and former executives including the head of military equipment production and the head of corporate logistics and supply.

One of those arrested was “caught ... while trying to destroy evidence”, the document read.

There was no immediate comment from the defendants or their lawyers.

Abiy - Ethiopia’s first leader from its majority Oromo ethnic group - was chosen by the EPRDF to head it after three years of street protests and strikes piled pressure on the coalition to reform.

Some analysts say Abiy’s reforms have targeted the old guard of the EPRDF, long dominated by the minority Tigrayan ethnic group. But others have suggested he must have high-level backing from senior members of the TPLF, the Tigrayan political party in the coalition.

“It would be a recipe for conflict to go against these big fish without consent, or some bargaining from the TPLF,” said one Ethiopian analyst who declined to be named.

Reporting by Aaron Maasho; Additional reporting by Maggie Fick; Writing by Maggie Fick and George Obulutsa; Editing by Robin Pomeroy, Andrew Heavens, Richard Balmforth