Comment: Legal Issues regarding the NBE Guideline on Diaspora-Owned Shares in Banks

Author:Tameru Wondim Agegnehu
Position:Tameru Wondim Agegnehu: LL.B, (Haile Selassie I University, currently Addis Ababa University, 1972), LL.M (University of Manchester, 1981), former Vice President of the Supreme Court, and currently Attorney & Consultant at Law, Email: tameruw@yahoo.com
Pages:404-409
SUMMARY

This comment examines the legality of Guideline No. FIS/01/2016 issued by the National Bank of Ethiopia (on November 1st, 2016) regarding the relinquishing of shares in banks owned by foreign nationals of Ethiopian origin. It is argued that at the time of the auction, an Ethiopian born foreign national remains to be the owner of the share unless it is proved that ownership is acquired... (see full summary)

 
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404
Legal Issues regarding the NBE Guideline
on Diaspora-Owned Shares in Banks
Nemo dat qui non habet (No one gives what he/she doesn’t have)
DOI http://dx.doi.org/10.4314/mlr.v11i2.6
Tameru Wondim Agegnehu
Abstract
This comment examines the legality of Guideline No. FIS/01/2016 issued by
the National Bank of Ethiopia (on November 1st, 2016) regarding the
relinquishing of shares in banks owned by foreign nationals of Ethiopian origin.
It is argued that at the time of the auction, an Ethiopian born foreign national
remains to be the owner of the share unless it is proved that ownership is
acquired fraudulently or with criminal intention. One can only sell what
he/she/it owns, and, the owners of the shares (to be relinquished in accordance
with the NBE Guideline) are clearly the shareholders in whose name the shares
were registered, and in effect, they are entitled to the premiums obtained during
the transfer of shares by auction. If the initial acquisition of shares is considered
improper, ‘two wrongs don’t make a right’ and thus, the proper procedures for
redeeming or repurchasing of shares under the Commercial Code should have
been pursued upon the exit of the shareholders, in the absence of which the
path taken by the NBE Guideline constitutes an act of sequestration,
expropriation or forced purchase.
Key terms:
NBE 2016 Guideline · Shares in banks · Shares in insurers · Diaspora ·
Ethiopian born foreign nationals · Ethiopia
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1. Background
I read a report by Menna Asrat on the Fortune Newspaper published in February
2017 about the bid put out by Awash Bank regarding shares owned by foreign
nationals of Ethiopian origin whose certificates were surrendered to the Bank in
Tameru Wondim Agegnehu: LL.B, (Haile Selassie I University, currently Addis Ababa
University, 1972), LL.M (University of Manchester, 1981), former Vice President of the
Supreme Court, and currently Attorney & Consultant at Law, Email: tameruw@yahoo.com

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