Former senior management members of the Development Bank of Ethiopia (DBE) are under investigation for alleged corruption crimes.
In conducting the investigation, the Corruption Crime Cases Division of the Federal Police Commission (Commission) has sent a letter to all commercial banks requesting reports, if any of the suspects have accounts with the banks and the amounts held under their names. The list submitted to the banks includes close to 30 people including six from DBE, the state policy bank.
Esayas Bahre, former long-serving president and Tadesse Hatiya, former vice president of the bank for credit services are two former officials included in theCommission’s letter.
The letter was sent to the banks two years after Essays’s dismissal and a year after Tadesse was relived from his post. Esayas was dismissed from his position at the end of 2016 after receiving a letter of dismissal from the Public Financial Enterprises Agency that was signed by the Director-General, Sintayehu Woldemichael (PhD). Esayas, who is currently pursuing his education overseas, became president of the DBE in 2008.
Esayas began his career in the banking industry at the Commercial Bank of Ethiopia (CBE) where he worked his way up to VP of Branch Operation & Coordination. During his removal, Esayas was accused of favouring a particular group of developers and commercial farmers in loan grants, who allegedly misused the loans for investments rather than the approved commercial farming purposes.
Tadesse was relieved of his positions on May 2, 2017, after Getahun Nana was appointed the head of the Bank replacing Essayas. Restructuring the management and bringing new blood, were the reasons listed by Getahun for removing Tadesse and his three fellow vice presidents. However, sources form the bank confirm that other controversies over high Non-Performing Loans (NPLs) ratio is what led to their removals. Tadesse was then assigned as an adviser to the director general of the Public Financial Enterprises Agency beginning June 29, 2017.
Tadesse started his career in the banking industry when he joined CBE as a junior marketing officer. He was then promoted as director of Customers’ Account & Transaction Services at CBE. He moved to DBE in 2009 where he served as vice president for credit management, and later he became VP for credit services. Tadesse has a BA degree in Management from Addis Ababa University (AAU) and a Masters degree in Business Administration & International Business from Greenwich University.
During the financial year of the past fiscal year, DBE reported that its NPLs ratio has increased to 25pc from 16pc in the previous year. This is quite a jump from 8.6pc just seven years ago. The rise of the ratio has been a headache to the management of the Bank, which then formed a high-level committee to detect the causes of the surge in NPLs ratio as it relates to any breach of policy and laws at the Bank. The committee reported that no official breach of a policy or law has occurred.
Sources from the bank claim that the former management team has approved numerous loan requests with exceptions, deciding against the bank policy for exceptional reasons.
DBE, founded in 1909 currently has 110 branches across the country. As of June 30, 2017, the total outstanding loans of DBE have reached 33.8 billion Br, of which foreign investors hold 9.9 billion Br. Among the loans provided to foreign investors, 26pc is given to Turkish investors, while Indians took 18.5pc and Israelis obtained 7.4pc.
Just weeks ago, after serving the bank for a year and a half, Getahun had tendered his resignation letter to the board of the Bank, requesting retirement. The board has not assigned a replacement as of this reporting.
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