Addis Fortune (Addis Ababa)
Wudineh Zenebe
18 March 2008
Addis Fortune — Judges at the Federal High Court, First Criminal Bench, unanimously passed a ruling on Thursday, March 13, 2008, acquitting two of the former senior managers of Commercial Bank of Ethiopia (CBE), after seven years of fighting multiple charges from jail.
Tilahun Abay, former president of the CBE, and Alachew Admasu, a board of director representing CBE's labour, are among the 41 former CBE top managers and staff members imprisoned since 2001, after charged by the Federal Ethics and Anti Corruption Commission (FEACC) for alleged abuse of office in breaching the bank's policies in approving and disbursing loans. Although numbers of businesspeople, whom the Commission alleged had benefited from these loans and advances, were arrested at the time, almost all of them were released in the past two years, leaving the bankers behind to continue fight several charges of abuse of power.
Last Thursday's ruling was the first since the case was brought to court in January 2002.
It involves an export of coffee worth a little over 60 million Br to Saudi Arabia, by Brehan Assefa Coffee Export Company, named after the former wife of businessman Temesgen Mehari. Although Commission prosecutors withdrew their case latter on during the litigation, Temesgen was also one of the 54 accused at the beginning, listed on the 52nd. Unlike the other defendants, he avoided spending time in jail, leaving for the United States where he stayed before coming back in 2006.
Commission prosecutors accused the two bankers, in one of the 29 charges they filed at the Federal High Court, for advancing loans to the company where Temesgen was general manager, when it exported 7,000tns of coffee to Saudi Arabia. Brehan Assefa Coffee Export Company had entered into an agreement with the now defunct Coffee Marketing Corporation, in December 1991. The Commission alleged that the two CBE managers advanced series of loans to Temesgen, while serving in the bank's loan committee, against CBE's policies and without securing sufficient collateral.
Temesgen had asked the National Bank of Ethiopia (NBE) to be permitted to export the coffee in exchange for an import from Saudi. The Prime Minister's Office at the time, under Tamrat Layne, had instructed NBE and Ministry of Finance to extend their assistance to the exporter, whom it said had won the bid to export the coffee.
CBE had agreed to pay the coffee's worth to the Corporation on the exporter's behalf, after holding the export documentations and the coffee exported under its name. The agreement was, it would have taken over possession of the merchandise (tyres and their tube) the exporter had promised to import. According to prosecutors, this did not happen; neither the import was made under CBE's name nor did the borrower services his entire debt, while both have failed to enter into a loan agreement.
Part of the imports, worth eight million dollars, were made under Brehan Assefa Coffee Export Company, while a large part never made it to the country. The Commission brought two witnesses to testify against the defendants.
The defendants, who had appealed to the Court for acquittal after prosecutors withdrew their case against the businessman in 2004, and met objections from the latter, brought to court two witnesses and other material evidences.
The Court decided that the export of the coffee in exchange for merchandise import was ordered by the government, and there is an evidence that showed a contractual agreement between Brehan and the Corporation. CBE, the judges said, did not need to enter into an agreement for an "advance on export bill" shipment, neither such transaction required collateral.
Although the two defendants were in the loan committee, the responsibility to follow-up disbursement and recovery - as well as ensuring that the imports should have been made to the bank - was the job of the International Banking Division (IBD) of the CBE. There was no ground to believe that the IBD conducted contrary to the Bank's policy, the judges said.
Brehan Assefa took the merchandise worth eight million dollars after starting payment of its debt, and has paid close to two million Birr; it had also asked the bank to settle outstanding payments, said the judges.
The judges found both defendants not guilty, but said they should continue the litigation of others cases prosecutors filed against them.
"It is sad to see them found innocent on this after all these years," said a lawyer who has been following the case. "Their case should have been tried much faster than it has taken so far."
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