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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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