Stolen $27m Back in National Bank's Coffers

27 October, 2008

(Addis Fortune) The National Bank of Ethiopia (NBE) disclosed on Friday, October 24, 2008, that it had secured back the 27 million dollars illegally withdrawn from its account at Citibank of New York.

Although the money was illegally withdrawn on October 7, 2008, Citibank only realized that two days later.

NBE receives financial statements from all its correspondent banks on a daily basis and checks them against its balance.

However, a statement NBE received from Citibank on October 9 showed that the former endorsed the withdrawal of 27 million dollars from its account and the balance was less by that amount against its record.

NBE immediately wrote Citibank that it had not endorsed any payment and brought to the latter’s attention that larceny had happened on the account as the withdrawal of the 27 million dollars was unauthorised. Moreover, in a letter signed by Teklewold Atinafu, governor, NBE requested all international banks to freeze the installments of the 27 million dollars from its account at Citibank.

Accordingly, three Nigerian nationals were detained as they allegedly went to a bank in South Korea to withdraw the said amount.

NBE’s deposit in forex at international banks is used to pay Ethiopia’s debt and finance government procurements upon the authorization of the Ministry Finance and Economic Development (MoFED).

“The transaction on the defraud withdrawal was at Citibank and thus the action doesn’t affect NBE in any way,” the central bank said in a statement it sent to Fortune on October 23, 2008. “It was done against Citibank.”

The fraud was committed using a forged signature of Teklewold, the NBE’s governor. Copies of financial documents with the forged signature were faxed to Citibank.

“NBE has never used fax and copied documents to endorse such transactions,” Alemayehu Kebede, director of NBE’s Modernization and Foreign Communications Directorate, told Fortune.

Astonished with how Citibank has been deceived, Alemayehu says NBE uses the highly secured SWIFT technology to endorse payments.

According to him, 10 million dollars of the 27 million dollars was returned to NBE’s account last Thursday, October 23, 2008, while the balance followed the next day.

The NBE, the ultimate authority in Ethiopia’s banking industry, supervises the three state-owned and eight private banks in the country, while five more are preparing to enter the sector.

It issued the first proclamation on monitoring the banking sector in the country in 1963.