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Unread post by Justice » 21 Jun 2010 17:27

Hoqqisa Garadha Dhufee Ilikaan Hindeebisu”
(When the puke gushes, the teeth can’t hold it back—Oromo proverb.)

Following the forcible closure of the Langano Bekele Molla Hotel, by the Commercial Bank of Ethiopia (CBE) and statements given by Ato Kifletsion Mamo, an officer of the Bank; hotel clients, workers of the hotel, individuals and other concerned parties have requested for our company’s clarification. To this end, our company, (Bekele Molla Hotels, BMH) will briefly state the important points of contentions between CBE and BMH.
On Ginbot 25, 2002 (All dates are in Ethiopian Calendar) the Commercial Bank of Ethiopia had forcibly closed the Langano Hotel, claiming: “The Langano Hotel was pledged as collateral for a Birr 67 million birr loan that was given to the National Trading Co. (NTC) for the purchase of the Tana Department Store,” (from the Ethiopian Privatization Agency.) CBE also claimed, that the collateral agreement was signed by Ato Bekele Molla himself, at the time of purchase.”

What CBE presently claims from NTC (Birr 90 million) came as result of underselling the Tana Department Store by CBE. The Tana Department Store, which is located at the heart of Mercato, has a 6000 square meters of vacant plot for development (out of the 7500square meters.) The Department Store itself is a four-storey building with a floor space of about 6500 square meters and was valued at Birr 117 million, at the time of its auctioning. However, CBE decided to auction the property at the floor price of Birr 43 million. This is where CBE incurred its major loss! To hide this mistake and to compensate for the loss, CBE continued to accrue interest on the balance, which is not in line with the foreclosure regulation and banking practice.

National Trading Co. (NTC) bought the Tana Department Store from the privatization agency, in Meskerem 29, 1988 and borrowed Birr 67 million from the Commercial Bank of Ethiopia. This loan was collateralized by the property bought. To this end, a loan and collateral agreement was signed on Meskerem 29,1988 between NTC and CBE.

This is clearly stipulated on the loan agreement and no other collateral was pledged on the agreement. Therefore, in this regard, the statement given by the bank’s officer was not true.

The collateral agreement, allegedly said to have been signed on Meskerem 29, 1988, was actually signed on Megabit 1990, for a Birr 30 million working capital loan for NTC; two and half years after Tana’s purchase. The working capital was to facilitate a sustainable operation of the Department Store and assure a sound repayment capacity.

Based on this, CBE initiated a pledge of the Langano Bekele Molla Hotel, for the forthcoming loan of Birr 30 million. In a meeting that was held at the Bank’s President office, on Megabit 7, 1990, CBE affirmed its support, which was in line with the government’s privatization policy. To expedite the loan request, the branch manager himself was instructed to have this document signed in two days. Following this, the ‘Temenja Yazh’ Bank branch manager himself went down to the Langano Bekele Molla Hotel in Megabit 1990, to have the collateral agreement signed by Ato Bekele Molla himself. This was testified by the bank manager, before he passed away.

Thereafter, CBE tried to employ all sorts of excuses to delay the agreed loan. Later on, CBE even requested additional pledges that included BMH’s leased land at Mesquel Square, with a paid up value of over Birr 12 million. With such frustrating developments, the NTC even contemplated to return the Tana Department Store to the privatization agency and accept the differential financial damages. Finally, CBE came out clearly and refused to give the working capital loan and decided to foreclose the property. This was communicated to NTC and BMH in Yekatit of 1993.

BMH then requested CBE to hand back the collateral agreement, which was signed by Ato Bekle Molla in Megabit 1990 for NTC’s working capital.
At this time, CBE replied by saying that the Langano collateral agreement was signed for the loan given to NTC (in Meskerem 29,1988) for the purchase of the Tana Department Store and put both properties (the Tana Department Store and Langano Bekele Molla Hotel) on a foreclosure list. This was a surprise and a shocking development to BMH!

Even though BMH knew for sure that the Langano Hotel pledge was not signed by Ato Bekele Molla in Meskerem 29, 1988, it nonetheless, requested CBE to give it a copy of the alleged document.

On Megabit 5, 1993, CBE gave BMH a copy of the said document along with an enclosed letter. Surprisingly, the document portended:
To have been signed on Meskerem 29, 1988, at the time of the Tana purchase!

The signatory on behalf of the Bank on the agreement form was not the serving bank manager who went to Langano to have Ato Bekele Molla sign the Langano collateral agreement, on Megabit 1990. Instead, it was signed by the previous manager of the same ‘Temenja Yazh’ bank, who had signed the initial loan agreement of Meskerem 29,1988. In Megabit, 1990, this person was serving at the bank’s airport branch and not at the ‘Temenja Yazh’ branch.

One of the witnesses, whose signature appeared on the document, was not even an employee of the Bank on Meskerem 29, 1988!
The Bank’s stamp put on the initial loan and collateral agreement, between CBE and NTC, differed both in size and shape, from the stamp put on the collateral agreement signed by Ato Bekele Molla for the working capital. It was later revealed that these two different stamps were never used at the same time!

The alleged collateral agreement was never registered by the legally empowered appropriate government agency—The Registrar. The official Registrar of mortgages of immovable properties, the Zonal Branch of the Justice Bureau of the Oromia Regional State, verified that it had not received nor registered any document pertaining to the pledging of the Langano Bekele Molla Hotel as collateral to any loan.
This was later certified by the above-mentioned office, in Megabit 1993. The above fact has been presented at Courts of Law, including the Court of Cassation

Following the above development, BMH repeatedly tried to present its case to the ever changing CBE’s management and through it, to the board. However, instead of facing the facts and trying to find solution to the quagmire, CBE adamantly tried to defend its mistakes by creating more improper moves and indefensible errors.

CBE, outside of its legal jurisdiction had repeatedly tried to use force to take over the Bekele Molla Hotel at Langano. Trusting the laws of the land, BMH had at several occasions got court rulings to stop the various inappropriate moves. CBE reacted to these court rulings by systematically orchestrating even more mistaken moves and employing individuals who were let-go from the various Courts of Law, for their lack of integrity, capacity and discipline. CBE offered these individuals handsome payments and benefits along with positions, ranging from District to management level. Their mission was to pursue the cover-up strategy relentlessly and to forcibly takeover the Langano Bekele Molla Hotel.

This strategy has helped subvert the laws of the land. By leveraging their formal/informal connections, the spin-doctors substantially undermined the government’s policy of democratic good governance. Ranting the empty rhetoric; “we are here to recover government’s money,” they managed to actually open a lot of doors within the administration. On Tikimet 1998, the prosecutor of the Zone was instructed by higher echelon to register the so-called collateral agreement that was allegedly signed on Meskerem 29, 1988, even when it was obvious that the ten years statutes of limitation on it had already expired! When a court case was filed against the prosecutor, CBE again intervened, claiming that it is the cause of the case and appeared at court as an intervening party.

In five separate cases that were litigated in the various Regional Courts, BMH had secured favorable rulings in all of them. Likewise, The Federal High Court and the Federal Supreme Court also ruled against CBE. The Court of Cassation however, had reversed the rulings of the lower courts. As the Court of Cassation is the highest Court of the land, BMH respects its ruling. We believe the various Counsels of Justice and professional associations will ultimately reflect and deliberate on the substance of the matter in their own good time.

BMH feels the Court of Cassation’s ruling must be executed only in a legal manner. CBE opted not to go for a court execution order; instead it took the law in its own hands and forcibly took over other properties that were not mandated by the Court’s ruling. Such improper and forceful action, besides directly affecting many innocent lives, has a potential to inflict incalculable damage to the aspiration of many developmental entrepreneurs.
Relationship between BMH and CBE started several decades ago, when both were still in their formative years. During those pioneering days, they were comrades in arms and were both engaged in the spirit of development and ‘Nation Building.’ The CBE branch (office and residence) in Moyale was itself housed in the Bekele Molla Hotel compound, long before CBE built its own branch office. It is common knowledge that both organizations didn’t come with yesterday’s rain. Unfortunately, the strategy CBE decided to employ, besides being arrogantly simpleminded, was unbecoming of a seasoned public institution.
Besides its commercial activities, BMH has been involved in supporting communities in its operating localities. To cite few examples, it had assisted in the installation of electricity and drinking water supply to the small village of ‘Dole’ near Langano. It has contributed to the upgrading of the secondary school and supplied school furniture and other materials. The elementary school in ‘Dole’ was fully built by BMH. Throughout the years, the Bekele Molla Hotel at Langano has served as a training platform for numerous local youth. Many have gone to establish their own small businesses in nearby market towns. The ‘Seyo Preparatory School’ in the town of Modjo is being built by BMH. This 16-block school for students destined to the universities will be readied for the next academic year. Delivering valuable services at affordable prices, to the Ethiopian public, have and will always remain BMH’s main objective. Because BMH considers these activities (commercial and community support) as part and parcel of its mission, it doesn’t feel they should be singled out for public mentioning. To the dismay of many, self-aggrandizement and attention seeking are not BMH’s internalized values.
BMH has gone through very trying times in the past fifteen years. This particular experience, without a doubt, will leave its indelible mark. Nonetheless, BMH promises to pursue its objectives without the crippling bitterness CBE tried to inflict on its collective well being, financial and otherwise with its ever-incessant wrong moves.

Bekele Molla Hotels, Pvt. Ltd. Co. has been in operation for over sixty years. Currently, it owns and operates seventeen premises throughout the southern part of Ethiopia. The ‘Langano Hotel,’ which has been the recreational place for all, has been giving hotel and camping services for over half a century. It has been catering, not only to the wealthy, but also to those with meager income; including students, government workers, local community, etc. “Hebir Ethiopia”, “The Garden Court” and the “Obelisk Bar and Lounge,” on the air side of Bole Int’l Airport, are its operating units in Addi

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