Horn Bank shareholder wants her money

Liquidator cannot find buyers

By Dawit Ketema

The liquidator of the defunct Horn International Bank is charged by one of the shareholders of the bank for alleged failure of returning her money. The bank’s liquidator, on the other hand, says 76 % of the bank’s shareholders have not yet collected their money from it.
Horn International Bank, whose majority shareholders were Eritrean nationals, was condemned by the National Bank of Ethiopia (NBE) to be liquidated in the eve of the Ethio-Eritrean War in 1998.
After a court order was given for its liquidation, the Cairo based accounting firm, Nawar & Company, was appointed as its liquidator and started its operation in June of 2000.
The bank, which is formed by some 1,000 shareholders of Ethiopian and Eritrean nationals, had a capital of 15.2 million Birr upon its establishment.
Lofti Bibawi, head of the Addis Ababa branch office of Nawar & Company, told Capital that his firm has made a decision to pay half of the bank’s capital to the shareholders right away during the beginning of the liquidation (to the tune of 7.6 million Birr) Though the liquidator advertised in different media outlets calling shareholders to collect their share value, only 24% of the bank’s owners reportedly approached and withdrew a total of 1.8 million Birr, Bibawi said.
Shareholder of the bank by the name of Bizunesh Tesfaye, filed charges at the Federal High Court, saying the liquidator failed to pay her back all her money she contributed to the formation of the Horn. She admitted that the liquidator had paid 50,000 Birr, half of the 100,000 Birr share value she owns in the bank. She accused the liquidator of denying giving her the balance of the money, which is rightfully hers.
Bibawi has denied the allegations saying the liquidation is not yet over. “We have not yet come to the net surplus value, as stipulated in the Commercial Code of Ethiopia. The net surplus value is attained after deducting all liabilities against the bank from the net proceeds of the sale of the bank’s assets. We have not yet sold all the bank’s assets,” Bibawi said.
Though the liquidator has succeeded in selling the bank’s vehicles, it had encountered problems in selling the assets of the bank’s HQ located between Dej. Beyenae Mered and Dej. Leulseged streets. Bibawi said the firm had offered local banks to take over the place but they have turned down turned down the offer, delaying the liquidation for over three years.
To make matters worse, the owner of the building – the state Agency for the Administration of Rented Houses (AARH) – had moved to evict the bank recently though the liquidator claims it is owes no rent arrear to the agency.
“The major fixed assets of the bank include the inbuilt teller booths and balconies, which can only be used by another bank, without which, the furniture is not worth much. “This is one of the reasons for the delay in the liquidation. We believe it is in the best interest of the bank’s shareholders to delay the sale to fetch a better price,” Bibawi added.
The bank owes close to half a million Birr to different creditors.
The liquidator periodically reports to the Federal High Court where it is also entitled to a 5 % service charge of the liquidation value.
The firm is engaged in rendering auditing services to different companies in Ethiopia, whose clients include Hilton Addis, Moenco, AMCE, and ORBIS.