Watani bank chairman released on bail [Archives:2008/1142/Local News]

Saddam Al-Ashmouri
For Yemen Times
SANA'A, March 30 ) The Sana'a court of appeals released Ahmad Al-Hamdani, chairman of Watani Bank for Trade and Investment, on a bail amount of YR 1 billion.

Chaired by judge Mohammed Al-Hakimi, the court issued a verdict preventing Al-Hamdani, who has U.S. citizenship, from traveling abroad until the closed bank's case is settled.

The decision to free Al-Hamdani, who once held several ministerial positions, including minister of Agriculture & Irrigation, was issued on condition that the court resume his case on April 19, 2008. Al-Hamdani was arrested while attempting to flee the country after his bank declared bankruptcy in 2005, the first to do so in Yemen. He was then transferred to court after being charged with deceiving depositors, granting loans to irresponsible contractors and wasting nearly YR 20 billion from depositors' funds. Similar charges were faced by other Watani bank management members, who were also released on bail.

At the most recent hearing, the prosecution provided a list of 292 debtors to the bank, who gave no guarantees yet they pay the money back. The debtors took loans amounting to YR 132,231,000.

The committee in charge of investigating the bank, after the Central Bank of Yemen (CBY) took control of it in late 2005 when it failed to fulfill its financial obligations, distributed nearly YR 6.5 billion, accounting for 39 percent of the bank's total debts and deposits, to depositors. The court of appeals' preliminary section sentenced Al-Hamdani in March 2006 to two years in prison and other management members to eight months each, but the defendants appealed the verdict.

In June 2005, deposits of customers and other banks in Watani bank totaled YR 22,604 million, while contractor debts did not exceed one third of the sum, contrary to the bank's announcement that unpaid debts resulted in its bankruptcy.

Statistics released by the bank prior to its closure revealed that interest for the first half of 2005 amounted to YR 149 million. 34% is the liquidity rate at the bank, 8.93% is the bank's capital efficiency rate and 25% is its liquidity rate in the Central Bank of Yemen.

Watani bank is the first bank in Yemen to face firm measures and was shut down by the CBY and its board of directors faced condemnation. The closure of the bank raised concern among Yemeni citizens with deposits in other commercial banks, some of whom withdrew their money, fearing a similar situation might happen to their deposits.
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