The next day, Karuturi's Chief Executive Officer Sai Ramakrishna Karuturi denied it in a press release; http://www.solidaritymovement.org/downloads/110510KaruturiGlobalDeniesReports.pdf asserting that the reports were completely baseless; making the stock surge upwards in a fast recovery.
At the same time, the previously non-public Karuturi
contract was posted on the FDRE website; which seemed to infer in Article 3.6 that Karuturi may have been right.
Under Rights of the Lessee it states that Karuturi
would have the right to: "Get additional 200,000 ha land upon accomplishing the 100,000 ha within two years as specified in sub article 4.4." In this sub article, it states that "lessee [Karuturi] must develop half of the leased plot of land within the first years.
In the FDRE's public statement, made by Esayas Kebede, he
acknowledged that Karuturi
was meeting this requirement. [ii] http://farmlandgrab.org/post/view/18549
The question here is, why this public spectacle of this dispute between the FDRE and Karuturi
when it all apparently came to nothing?
Was it to please critics of the land deals?
Was it to intimidate Karuturi
in some way by using misleading information to influence stock prices-which could be considered a crime under securities law in most countries?
signed lease agreement for the first 100,000 ha, they have been given the land for fifty years at a total cost of only 100,000,000 birr ($5,928,758.42 USD); or only $59.28 (USD) per hectare for full use of prime agricultural land.
It gives support for police or military action against any resistance: "The lessor [FDRE] shall ensure during the period of lease, lessee [Karuturi] shall enjoy peaceful and trouble free possession of the premises and it shall be provided adequate security, free of cost, for carrying out its entire activities in the said premises, against any riot, disturbance or any other turbulent time other than force majeure, as and when requested by the Lessee."
is simply "given the right" to build infrastructure as they want and need.
In other words, what incentives do these Ethiopian officials have to not change the rules midstream or to simply terminate a contract in the future, such as with Karuturi
and Saudi Star , when another investor might offer them 10, 20, 50 or 100 times more in a few years?