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It was hardly an easy decision for
the directors, who were split on their votes. Before
firing him, the board was divided as they debated
whether Leikun should be fired; the group that
argued he is responsible for what happened on his
watch eventually won by a majority vote, according
to sources.
The decision comes as the names of
the new board of directors are pending approval from
the central bank. The nomination of ODA S.C. as the
12th nominee to the new board slowed down the
approval of the new directors. Only one term had
passed since ODA previously served on the board,
instead of the required two, and its nomination was
rejected by the central bank.
Among the nominees to the new board
is Tsehai Shiferaw, vice president of Credit and
Risk Management for AIB, who was temporarily
appointed to Leikun’s position during his
suspension. He had received the majority of votes
(265,342 out of 3,698,430) during the election.
“I’ve no comment at this moment,”
Leikun said when approached by Fortune for comment
on his dismissal.
Neither did Bekele Nedi, chairman of
the board of directors, want to comment on the issue
except to confirm Leikun’s dismissal.
“It’s a sad day for the Ethiopian
banking industry,” said a senior executive of a
private bank.
Many in the industry indeed concur
with this view, for Leikun is one of the executives
in the industry who commands the respect of his
colleagues.
A graduate of the Addis Abeba
University in the 1960s, Leikun started his career
in banking with Addis Abeba Bank, which used to be
run by Debebe H. Yohannes. Leikun was a junior
banking officer first before he was promoted to a
senior position when the military junta nationalised
the bank and merged it with the state owned
Commercial Bank of Ethiopia (CBE), in the late
1970s. Leikun had also served as a general manager
of the CBE before he left the banking industry in
the late 1980s, to join the state owned agricultural
produces enterprise.
The advent of the EPRDF government,
and the return of some of his friends claiming
senior positions in the new goverment, had landed
him a position as the first governor of the central
bank, in post-Derg period. As a governor, he was to
sign on the first licence given to a private
commercial bank in 1996, the Awash International
Bank, where the main promoter, Bulcha Demekissa, was
its first president.
Departing the central bank in 2000,
after replaced by Dubale Jale, Leikun joined AIB as
it second president. During his tenure, he has also
been serving the Ethiopian Bankers’ Association as a
chairman, before giving up the position to Brehanu
Gateneh, who is also president of United Bank.
In his mid-60s, Leikun’s
contemporaries in the banking industry include CEOs
such as Lulseged Teferi, president of Dashen Bank.
During his years at the AIB, the
bank has prospered making profits throughout the
decade; he also oversaw the completion of an
ultramodern headquarters recently opened for use on
Ras Abebe Aregay Street.
Nonetheless, his reputation has been
marred lately with a controversy that caught up
Mitiku Abeshu, vice president for international
banking, and senior staff members of the branch he
had been managing.
Members of the investigating
committee included three major shareholders: ODA SC,
Omedad Plc, and the Ethiopian Evangelical Church of
Mekane Eyesus, represented by Debella Gutema,
Getamesaye Degefe, and Girma Boreshe, respectively.
The two individual majority shareholders on the
committee are Wole Gurmu and Negasa Tumsa.
Among six employees, this committee
investigated alongside Leikun, his executive
secretary and the head of the logistics department
(who is also Leikun’s nephew) were fired, subsequent
to the central bank’s decision to dismiss Mitiku.
They were found to have abused their
position in the bank to benefit a private business
they were running, the committee said. The other
four had one month’s salary docked and allowed back
to work, two weeks ago.
Despite NBE’s decision to remove
Mitiku from his position, he was nonetheless
appointed by Leikun to serve as his special advisor.
The investigation that led to the firing of the
first was launched after NBE wrote a letter of
reprimand to the board of directors for events
surrounding the alleged misdemeanour.
In a rare move, regulators at NBE
ordered Mitiku to be fired, citing that “he did not
deserve the appointment after the findings of the
investigation following the allegations made against
him,” in the same letter.
The central bank also ordered that
the role of Leikun in the alleged misdemeanour be
investigated and that the board of directors report
the findings to NBE by January 8, 2011. Apart from
being fined 10,000 Br, AIB was also ordered to
investigate the procedural errors which had
contributed to the incidents related to the alleged
misdemeanour and to report its findings along with
that on the president.
The president’s dismissal comes at
the end of three months during which the bank has
been mired in controversy, overshadowing the recent
inauguration of its headquarters, the first time for
a private bank to own the building housing its head
office, and the announcement of a 247 million Br net
profit after tax during the 2009/10 fiscal year.
The bank is expected to report its
decision about Leikun to the central bank this week,
according to sources.
“It ought to be a sad decision for
the board, for finding a replacement of a person of
Leikun’s stature and calibre will be extremely
difficult,” said an expert representing an
international bank that has working relationship
with AIB. |
