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January 2, 2008

DBE investigated by Ethics and Anti Corruption Commission

by Richard Kilner

Story link: DBE investigated by Ethics and Anti Corruption Commission

Senior executives of the Development Bank of Ethiopia are being investigated by the Federal Ethics and Anti Corruption Commission.

Insiders say that the executives of the state-owned organisation are suspected of not following proper procedure when approving new loans.

The amount involved was 250m birr at the time of lending, which has now snowballed into 312m birr after interest.

In February 2006 Moges Chemere led seven bankers who were removed from office due to corruption, each one serving seven years. The current executives, led by Wondossen Teshome, replaced them to take the helm of the Development Bank.

The new leadership team have stated that they are transforming the bank’s fortunes, reporting 20m birr profit in the last financial year. Contrary to this view are the rumours of the bank’s insiders, who claim that over 90% of the bank’s 5bn birr loan portfolio is in default.

It is reported that the executives approved a loan rejected by the bank’s own loans committee, and that they have substantially overestimated some of the bank’s collateral.

It is also alleged that the executives have granted fresh loans to individuals who have failed to keep up with the repayments on their existing debts.

Due to the ever increasing number of accusations being presented to the commission, it is unclear how many will be investigated.

Commission sources have indicated that in the rescheduling of loans the bank’s executives acted beyond their authority.

 

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