Ethiopian investors sue Abe Kalpana, Otafiire's son over grabbing top Kla bar

NATIONAL | An Ethiopian couple has asked court to stop Japanese businesswoman Abe Kalpana and her associates from kicking them out of a business in Kampala. 

Ms Ayalew Tigsit Melkamu and her husband Woldemichael Sisay Bekure say Ms Kalpana, Ms Debra Marie Hayama and Mr Fidel Otafiire Mugarura are fraudulently claiming ownership of Ephrata Investment Group Ltd.

Mugarura is son of Interior minister Kahinda Otafiire while Kalpana is married in the family of former Japanese prime minister Shinzo Abe.

Investment group Ephrata was registered in Kampala in 2013 and, among others, ran Hideout Bar and Lounge along Lugogo Bypass.

"Our vision was to operate the most sought-out and successful bar and lounge in Kampala," Ms Melkamu says in the May 28 affidavit filed before the Commercial Division of the High Court in Kampala.

The investment group, the couple said, was inspired by and named after their daughter Ephrata.

But Ms Kalpana, a former vice president of a major paint company in the country who is facing a separate legal suit for failure to pay rent in Munyoyo, apparently had no time for such family sentiments as naming a business after a doting child.

Interestingly, the affidavit suggests that Ms Kalpana's rent defaulting habit has preceded her reputation again, this time at the new business.

On May 2, Sama Holdings Ltd, through their lawyers, Signature Advocates, asked Ephrata to vacate the Lugogo premises by May 8 if they failed to rent amounting to over $140,000 (Shs520 million).

However, the Nile Post understands the rent goes three years back, by which time the Ethiopian couple were still the sole directors.

The accused persons have since been trading under a new name, Black Zones Recreation Club, which MS Melkamu says is illegal.

Through her lawyers Tara Advocates, Ms Melkamu says Kalpana and Hayama hired Mr Mugarura as the Ephrata Investment Group company secretary without the consent of the founders.

Seeking several injunctions until the main application is heard and disposed of, the couple says they co-opted Kalpana and Hayama in the post-Covid pandemic when they were trying to reinvent the business to keep it afloat.

The two directors of Ephrata were forced to innovate post-Covid-19 and subsequently developed a new concept for the bar to enable it stand out,

"In pursuit of this innovation, we conceived the idea of expanding Ephrata Investment by adding a bowling and gaming recreational centre with punching, shooting, F1 VR, VR simulators, PS5, darts, and a fully-fledged bowling alley," Ms Melkamu told the court.

"Once completed, the new Hideout Bar and Lounge would be the only one of its kind in Uganda. For this, we required an infusion of capital investment in Ephrata."

The couple documented the concept and shared the proposal with several prospective investors, eventually deciding to proceed with Kalpana and Hayama.

Melkamu said she shared a past casual relationship with Kalpana.

In 2023, in exchange for the capital injection into the business, Kalpana and Hayama acquired equity in Ephrata worth 25 shares each, constituting 50 percent of the shareholding.

The two Japanese businesswomen were also appointed directors with the intention of jointly managing the business.

"Unknown to us, they appear to have had ulterior motives to aggressively and mischievously take over Ephrata Investment under the scheme of framing us as villains to garner sympathy and votes for a hostile takeover," Ms Melkamu says.

It had earlier been agreed that Mr Bekure travel to China to procure all the necessary equipment for the expansion project, which he did.

But upon her husband's return from China, Melkamu says Kalpana took over the equipment and the operations of Ephrata and started framing Bekure for fraud.

"She alleged, without any proof, that Bekure had, while in China, used the money for personal gain yet he had shared invoices and receipts for the purchases," Melkamu says.

"Bothered by the allegations, we asked that the parties participate in an audit to verify the purchases made by Bekure. They refused."

The two halves of shareholders of the company fell out and Kalpana allegedly nudged the Ethiopian founders into a more passive role.

"We have since learnt that Kalpana and Hayama have rebranded Ephrata's business from the well-established Hideout Bar and Lounge to Blackzone Recreation Club without our consent and without any reasonable justification," she said.

"We also recently learnt that they appointed Mugarura [as company secretary] without our knowledge and consent, which is irregular considering we are directors."

On May 5, the Ethiopian couple was served with a special notice calling for a meeting to pass a resolution for their removal as directors on account of the allegations of fraud.

The notice was issue by Mr Mugarura.

"The continued allegations of fraud against us are defamatory and violate our well established reputation, goodwill and integrity built over the years, without justification," Melkamu said.

"The impact of such defamation cannot be quantified."

While their lawyers, Tara Advocates, wrote to Mugarura on May 14, in response to the notice, the couple says the respondents have not favoured them with a response.

The couple the "continuous and unbridled impunity" of Kalpana and Hayama is detrimental to their mental wellbeing "each passing moment".

They asked the court to issue an interim injunction against Kalpana, Hayama and Mugarura, their agents from transacting company business on any accounts other than those to which the applicants are signatories until the main application is heard and disposed of.