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It seems yet another controversy is brewing at Awash
International Bank (AIB) just as one started a year
ago that saw Leikun Berhau fired from the president
ship and in legal battle is abating. Five
shareholders have sued the bank at Lideta Federal
First Instance Summery Procedure Court ahead of its
general assembly to be held in the coming weeks.
The suit claims that the bank has infringed both the
commercial code and the bank’s working procedure by
illegally appointing three individuals
to the board and illegally transferring shares to
them.
The suit was filed on October 27, 2011, by Gemechu
Guta, Wondimu Umeta, Merga Afeta, Mulatu Gurmu and
Mualtu Gemech. They claimed in their charge that
three individuals – Biniam Terfa, Girma Boshe and
Elias Bedada – were appointed to the board of
directors of the bank while they were not legal
shareholders.
This fact was not communicated to the general
assembly held in November 2010, which elected them,
and the central bank, which accepted them, the
charge claims. They were elected to the board as
shares of the bank were illegally transferred to
them in contravention to the commercial code and the
working procedure of the bank, it further states.
The five shareholders claimed that the bank has
violated the right of choice of shareholders to buy
old or new shares issued before they were offered to
outsiders. Even if the shares were transferred
legally, their position as a shareholder could only
be affirmed if the general assembly to be held this
year approves it, the charge further read.
As the names of these individuals was not among
those new shareholders approved during previous year
general assembly, they cannot be considered
shareholders let alone board members, the charge
signed by Hailu Burayu, lawyer of the five
shareholders, reads.
Hailu in the charge also wrote that no
administrative measures were taken despite repeated
appeals to the central bank.
“However, it is the main responsibility of Awash to
rectify the problem,” the charge says.
However, it is not only the election of the board
members that the shareholders are contending in
their suit but also the composition of the board as
well.
Although the article of establishment dictates the
board should have 12 members, it has less than the
requirement they claimed.
“It should be filled by taking the next in line with
the highest vote to fill the gaps,” the charge,
which asked the court to order the Board of
Directors of the bank to do so, reads.
The shareholders also asked that the shares, which
they say were transferred illegally to be cancelled
and offered to existing shareholders.
The court adjourned the case to December 10, 2011,
to commence the preliminary hearing while AIB is
ordered to submit its response five days before the
hearing.
Among the list of witnesses of the five shareholders
is Bekele Nedi, former board chairman of the bank
and Leikun Berhanu, former president of the bank.
Leikun had been involved in the controversy that saw
him fired and sentenced along with other bank
officials charged with misdemeanour in handling
letters of credit (LCs).
Although Leikun was sentenced to a one year and
three months prison time and a fine of 10,000 Br, he
is out on bail now appealing his sentence to
appellate court of the Federal High Court. The final
verdict in the appeal case is scheduled for two days
after the case he is called to testify is to be
heard. |
