Khalifa Bank needed 7,400 billion to be saved, says administrator

Khalifa Bank’s administrator and Algeria’s former finance minister Mohamed Djellab Sunday gave a comprehensive assessment, saying management was “catastrophic.”

Instead of giving loans to customers, Khalifa Bank transferred them to the group’s subsidies including Khalifa Airways, Djellab told the court.

He added that he submitted a report to the banking commission. It included some suggestions to save the bank or liquidate it. The commission’s decision was liquidation.

Abdelmoumene Khalifa told the judge the decision was illegal while his lawyer wondered why the administrator did not give other solutions to save the bank. He believes that the liquidation was “planned.”

“I did my best to save the bank but the management way did not help me,” said Djellab.

The former minister told the judge about his appointment at the bank after he had been a deputy director at Algeria’s CPA bank.

Judge: when you were appointed by the banking commission, did it have information about the bank at that time?

Djellab: when I started working there, there was no manager. We started working with executives.

Judge: how was the bank’s management?

Djellab: we started examining documents. There were no annual reports neither documents related to the Central Bank. As we made progress with executives, we found big difficulties in submitting reports. The bank had resources, a capital and clients.

According to the law, loans should not exceed 20 percent of the company’s capital. That means 100 million centimes. Yet, there were loans estimated at about 80 billion centimes.

Judge: how much was there at the bank because Khalifa said he left 9,700 billion centimes?

Djellab: a difference must be made between resources and treasury. The bank’s money was estimated at around 130 billion DZ. Tis money was used in investments and illegal loans. Speaking about treasury, it is something else. There were frozen sums estimated at 4 billion DZ which were supposed to go to the Central Bank. After inspecting the main treasury, it was found a lack of about 2 billion DZ and 1 billion in hard currency.

After examining the bank situation, we found out that it needed around 74 billion DZ to operate again.

Judge: you said Ali Ben Ouari wanted to help you.

Djellab: yes, he tried with us. We brought the money. The purchased company represented 26 percent of Algeria Societé Générale’s shares.

Jugde: how about the letter about water desalination stations you had found at the bank?

Djellab: the letter was fake.

Judge: how about loans?

Djellab: we stopped loans. There was no loans commission. Khalifa Airways obtained 60 billion DZ although it had no guarantee.

Judge: how do you describe the bank’s situation?

Djellab: it was not in conformity with the law in terms of money use.

Judge: did you check the bank’s capital in the beginning?

Djellab: we did. We had doubts. We asked assistants to contact Rehal to get more information. My assistant received me and I did not continue the process.