Hidden conflict behind Watani Bank funds squander [Archives:2006/916/Business & Economy]
The ongoing trial of those accused of squandering Watani Bank depositor and shareholder funds has disclosed there was a hidden conflict regarding money wasted and seizing it.
The penal court of first instance specialized in trying nine members of Watani Bank's board of directors, two of them still at-large, began trying them on charges of betraying confidence and wasting depositor and shareholder funds estimated at YR 19,760,829,000 (YR 19.7 billion), not YR 47 billion announced when the Central Bank of Yemen (CBY) seized control of Watani Bank.
Lawyer Jamal Al-Ju'bi described the case as a conflict between state power centers, arguing that if it was purely economic, Watani Bank's condition was no secret to the CBY for many years, as the bank's reports confirm. He emphasized that the issue was political, aimed at liquidating high-ranking power centers, resulting in inflicting harm on the banking system.
Al-Ju'bi pointed out that there could be some solutions to the problem of financing Watani Bank, but what previously occurred does not disclaim that there were mistakes by members of the board of directors of Watani Bank for Trade and Investment. In a statement to As-Sahwa newspaper, Al-Ju'bi affirmed that through the case procedures, some board members have been arrested, whereas other influential parties were not. He added that referring the case to the specialized penal court meant there were some matters intending to be hidden because the extraordinary court is one of state security, which concept bears that trial proceedings are suppressed.
The general prosecution representative stated that the defendants betrayed confidence as they facilitated squandering depositor and shareholder funds for themselves and others. He accused them of taking loans and illegally spending large sums on themselves, buying some shareholders' stocks for sums exceeding the shares' market value and granting loans to some parties without any guarantees. He also charged the first defendant with accepting a bribe from the ninth defendant in return for facilitating a loan for him.
Some defendants confessed to the circumstantial evidence list and prosecution's investigation, confirming they would repay what is due the bank, while others denied the charges against them. Abdullah Hashim, lawyer for defendant number one, Watani Bank board chairman Dr. Ahmed Ali Al-Hamdani, refuted the penal court's specialty in prosecuting Al-Hamdani's case. When Hashim requested the court entrust a specialized firm to study the matter and report back on it, he pointed out that since the CBY seized control of it, YR 4 billion has been delivered to Watani Bank and loans repaid by entrepreneurs. He asked about the fate of these sums.
Specialists wondered if the Central Bank's seizing control of Watani Bank had any precedence, adding that such action should have been the final solution. They stated that Watani Bank's bankruptcy had not been declared yet, adding that the CBY should have interfered at the decisive moment to rescue the bank. They said despite CBY authority to monitor other banks in case of poor management, there must be other warnings, adding that a committee entrusted by the CBY did not announce whether Watani Bank's assets were enough to cover its obligations. They also stressed that it is CBY's duty to find solutions because the present situation has generated a crisis of confidence and a wave of bank deposit withdrawals, heralding some banks' collapse.
Last Dec. 7, the CBY issued a statement of Watani Bank's board members' retaining assets in all Yemeni banks and ordered the attorney general of public property prosecution to retain accounts of board members, bank directors and their relatives.
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