Zemen Bank In Ethiopia Receives A Serious Blow

Zemen Bank In Ethiopia Receives A Serious Blow Zemen Bank

Delivering a serious blow to Zemen Bank, one of the players in the private banking industry of Ethiopia, which is also known for operating on a unique one-branch banking model, the National Bank of Ethiopia (NBE) has moved to ban two senior Vice Presidents of the bank who have worked in their positions for over five years.

The decision has barred Helawi Tadesse, Senior Vice President, and Sibhat Belayneh, Vice President for Finance and International Banking in a letter that was written to the bank and the VPs on Tuesday.

According to sources, the two VPs were barred because the bank has discovered some alleged acts of favoritism in the conduct of the two VPs especially in relation to loan approval and assignment of foreign currency to the bank’s clients.       

The move came as a shock for some in the banking industry who talked to The Reporter. The alleged misconduct of VPs come particularly in relation to two companies and the process by which a bank loan was approved for them and the way foreign currency was assigned to these companies, sources said. Furthermore, sources also indicated that the two cases, which were referred to by NBE’s investigation, happened some five years ago.

Nevertheless, they say that the two VPs and the bank have been in discussions with NBE regarding the alleged misconduct which referred to a loan and a foreign currency approval to two clients of the bank. According to sources, the two VPs has answered to NBE and tried to clarify the allegation of misconduct levied on them.

In fact, sources told The Reporter that the VPs were convinced that they have addressed all the concerns that was raised by the regulators. And that they were confident that they have not done anything that could be construed as misconduct.

Source also said that with regards to the issue of foreign currency approval there was nothing that could raise flag since the bankers followed the rules and regulation of the bank when dealing with their foreign currency clients. Apart from that, there is nothing in the loan approval process that could be taken as misconduct or potential favoritism since all loans are approved by a committee decision.

According to sources, as far as the Helawi is concerned, the decision of NBE is in relation to a loan that was approved by the bank some five years ago. At the receiving end of the loan approval was the now defunct Pioneer Agro Industries PLC, a company under the umbrella of the Access Capital.

Sources also say that, the loan which was given to Pioneer five years ago has already been written off as bad credit. Nevertheless, the case the regulators has brought against Helawi could carry some merit since he was working in Access capital, the parent company of Pioneer, while holding the position to approve loans in Zemen Bank.

Helawi joined Zemen Bank from the International Monetary Fund, where he was a Senior Economist based in Washington DC. As a member of the Strategy, Policy and Review Department, he was part of a central unit that approves and monitors all of the IMF’s lending programs with member countries.

In this connection, he was the primary review economist for several countries borrowing from the IMF’s low-interest loan facilities, with responsibility for assessing the content and adequacy of the macroeconomic adjustment programs proposed by staff teams. Helaway is a graduate of Princeton University (MPA, Economics & Public Policy) and Reed College (BA, Economics).

Sebhat also has a successful track record in International Banking Operations for over 13 years. The last position he has held before joining Zemen Bank was Deputy Manager for the International Banking Department of Bank of Abyssinia.

Major duties and responsibilities under this capacity included: directing and supervising the activities of the Department, authorizing foreign payment instruments, handling correspondences, investigations, and assuring the smooth operations of the department. He has developed training and work procedure manuals for Bank of Abyssinia and has participated in the evaluation of the bank’s system and the core banking software while serving in the above position for almost three years.

His academic qualifications include BA Degree in Economics, Diploma in Commerce (Banking and Finance) from the Addis Ababa University College of Commerce. In addition, he has attended International Bankers’ Course at HSBC Bank PLC’s Training and Development Center, London, UK and received a Certificate.   

Tagged as:

National Bank of Ethiopia, Zemen Bank, Helawi Tadesse, Sibhat Belayneh


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