Ethiopia Arrests Dozens in Graft Probe at Key Conglomerate

(Bloomberg) -- Ethiopian police arrested dozens of people in an investigation into suspected corruption at Metal & Engineering Corp., a key industrial conglomerate linked to the country’s military.

Ethiopian Prime Minister Abiy Ahmed is enacting a pledge he made after coming to power in April to reduce the security forces’ role in the state-planned economy, part of sweeping reforms he’s initiated. Three months ago, the government ended MeTEC’s involvement in a $4.6 billion hydropower project.

Federal police detained 63 people, including 27 suspected of graft, Attorney General Berhanu Tsegaye told reporters Monday in the capital, Addis Ababa. The state is in talks with foreign countries about arresting suspects who are abroad, he said.

A five-month probe found that MeTEC spent 37 billion birr ($1.32 billion) on procurement between 2012 and 2018 without competitive bidding, with some projects handed to relatives linked to employees abroad, he said. Berhanu is a newly appointed member of the executive committee of Abiy’s Oromo Democratic Party, a constituent of Ethiopia’s ruling coalition.

MeTEC spokesman Mikhail Desta directed a request for comment to the attorney general’s office.

Among those detained are MeTEC’s ex-director-general Brigadier-General Kinfe Dagnew, who was apprehended Monday night at Ethiopia’s border with Sudan, the ruling party-operated Walta Information Center reported on Tuesday.

The attorney general’s office released a list of 27 people suspected of corruption, 23 of them military personnel working for MeTEC. The list, circulated Tuesday by the ruling party-funded Fana Broadcasting Corp., included Brigadier-General Tene Kurunde, whom MeTEC spokesman Mikhail said in June was redeployed to sales and marketing at MeTEC, after heading civil and commercial products.

To contact the reporter on this story: Nizar Manek in Addis Ababa at nmanek2@bloomberg.net

To contact the editors responsible for this story: Antony Sguazzin at asguazzin@bloomberg.net, Paul Richardson, Michael Gunn

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