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

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 natio...

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Published in:Mizan law review Vol. 11; no. 2; pp. 404 - 409
Main Author: Wondim Agegnehu, Tameru
Format: Journal Article
Language:Amharic
English
Published: St. Mary's University, Addis Ababa 23.03.2018
Subjects:
diaspora
ethiopia
ethiopian born foreign nationals
nbe 2016 guideline
shares in banks
shares in insurers
ISSN:1998-9881, 1998-9881, 2309-902X
Online Access:Get full text
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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.
AbstractList 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.
Author Wondim Agegnehu, Tameru
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Snippet 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...
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SubjectTerms diaspora
ethiopia
ethiopian born foreign nationals
nbe 2016 guideline
shares in banks
shares in insurers
Title Comment: Legal Issues regarding the NBE Guideline on Diaspora-Owned Shares in Banks
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