I emailed a couple of Warka contacts and received the following in response:
Mohammad K. Issa wrote:
>
> Dear Sir,
>
> Please note this information has been posted by an Iraqi Brokerage firm another competitor in the market where each competitor based on their own evaluation and assessment sets their strategy, tactics and business plan to promote their business and interests in the market attracting cliental to their establishment noting that our bank from day one through its capital increases has been the only company that generated and guaranteed continuous profit and bonus gains to its fine shareholders bringing added value, incentive and profit.
>
>
>
> Our bank currently holds the largest capital and cliental whereby the number of foreign investors are increasing on a daily basis where Warka Bank will resume trading once it finalizes its entire committee procedures and set protocols.
>
>
>
> With regards to our finances it is very important to note that in accordance with standard practice and procedures set in Iraq our bank must submit its finances 30 days prior to holding our general assembly to the CBI, Iraqi Company Registration Office and the Iraqi Securities Commission the related authorities in Iraq to study, review and thoroughly assess our finances where at our general assembly our finances were approved and certified by the CBI, Iraqi Company Registration and Iraqi Securities Commission noting at the said meeting representatives from the Iraqi Securities Commission expressed their thanks and appreciation for finalizing and submitting our finances in accordance with the set requirements and deadline where representatives of the said parties added their seal of approval.
>
>
>
> Although the firm policy of our bank is not to reply to posts and articles posted on the website however our Chairman of the Board – CEO has personally contacted the said company conveying and expressing his thoughts to the information published by the said company.
>
>
> Best regards,
>
>
>
> Mohammad
I also received this email in response to my inquiries:
Dear Sir,
In reply to your e-mail where you are concerned about your investment in warka bank, kindly find below our communication with Mr. Taha who runs the brokerage company and I am sure in due time he will back down on his allegations.
Thank you for writing to me.
Dear sir , we remain.
Saad Sadoon Al-Bunnia
Chairman of the Board
Warka bank for Investment and Finance
From: Saad Al-Bunnia [mailto:ceo@warka-bank-iq.com]
Sent: Monday, July 05, 2010 10:45 PM
To: 'Shwan Taha'
Cc: 'nbaban'; 'nasser'; 'Mohammad K. Issa'; 'haitham'; luay AL-OKAILI; 'Shwan M. Al-Mulla'; Hassan Aldahan; 'gm'; 'haitham'
Subject: RE: Rabee Securities_Iraq
Dear Mr. Taha,
Thank you for your prompt feedback which is very much appreciated knowing the fact that we are dealing with a professional person like you that knows what he is doing.
First and foremost, let me extend my keen regards to Mr. Baban and to all our friends and investors being local or international for having the confidence and faith in warka bank. Please allow me to take some of your valuable time for you to read and understand my points which is basically in a nut shell it is a matter of cash flow issue. I will detail you with all the circumstances and issues related to warka bank in complete honesty and transparency as this is how we work in the bank and for you at the end of the day, to judge and re-think of the situation and give all your support and help to warka bank. whatever is being written down below will be publically announced in a meeting next week to the media, officials and the public. Of course, whatever we are saying is being backed up by documents to show the conspiracy on warka bank.
It all started in mid 2007 when a money transfer company in the name al-tayeb transfer company was incorporated with the support of warka bank in order to have all outgoing overseas transfers to be directed through this company by using warka bank branch network in order to avoid and eliminate any dangerous acts such as money laundering, terrorism and any other matter that the government can use as an instrument to cripple warka bank down and does not jeopardize the warka bank name. The reason for this decision is because I was arrested by the American forces in the year 2005 for ten days under the allegation that I transfer huge amounts of money from iraq to Jordan and lebanon, which did not please some Politian, knowing the fact that all the matter was approved, supervised and controlled by both the central bank of iraq, ministry of defense and of course the American army as they handled actual movement of funds by air in huge amounts. The shareholding structure of al-tayeb company was 25% saad (on behalf of the bank), 25% Raad al-badri who was at that time an employee of the bank , 25% sayed hamad al-musawi , 25% for ahmed al jebouri who is the deputy governor of the central bank of iraq in which his shares were in the name of his nephew and later on transferred partly to his daughter which registered at company registrar ministry of trade.
Things went well in the first hand and a lot of transfers were made. After a couple of months , and after seeing the profitability of the operation , the other three shareholders decided that the company should be independent from the bank and it should establish its own offices and operate on its own without the use of warka. Competition started between the two parties which is a normal healthy practice in any normal economy but unfortunately not in Iraq. Because of the greed of the other party and due to the strength in the position of Mr. ahmed al jebouri, we were stopped from entering the auction once every two months for five days where Mr. jebouri sends a committee to check our books and papers. With our strong management team, we managed to overcome these stoppages and continue our business as normal matter not getting our clients to be affected at all.
In june 2009, Mr. raad al badri , tried many tricks to cripple the bank. Three major cases were compiled against the bank of which all are related to finance of terrorism and illegal actions by the bank. knowing exactly what we are doing which is all 100% legitimate and above board, we managed to prove all the false allegations and the files were closed. Mr. Badri problem was that he wanted us to agree with him on the transfer fees which I personally refused to accept as this will mean the harm of many people who live from such business. For us closing all these dirty files, he managed to get hold of the ministry of finance MUSRIF AL AAM and told him that we pay bribes to government institutions in order to put their funds in warka bank. At that time, we had over 900 billion dinars worth of deposits from various governmental entities in which these funds were used to open letter of credits and contract monies for our clients. Ministry of trade was the major depositor where we pay interest on these deposits as they were not free of charge. By july of 2009 we received letters from all the government entities to withdraw their funds upon the instructions of the MUSREF AL AAM not taking into consideration the effect of the cash flow on the banks as well as the letters of credit opened to their clients. We were pushed to pay these funds even though other banks such as dar al salam refused to return the money until today. A board of directors decision was taken whereby we return the money to the ministries in order to avoid complications such as imprisonment of our staff. what ever happened did not affect the bank as the credibility of warka bank was and still is very high and the move of the competitors did not affect severely the position of the bank.
Knowing the fact that all the above measures did not stop the warka bank machine to stop, ahmed al jebouri managed in a board of directors meeting to take decisions against the bank of which will result in the complete close down of the bank even though it is not according to the by-laws of the central bank as there need certain measures to be taken before such a decision is taken. these points are:
Closing down 57 branches out of the 130 branches under the impression that they do not have final license
80 million dinar fine for each branch
Not allowing us to participate in the cbi auction (which is what ahmed al jebouri really wanted as this will leave the ground open only for his company)
Not allowing us to open branches for the year 2010 and 2011.
With this document in Mr. Raad hand, he started circulating it to all the local banks including to our corresponding banks and the central bank of lebanon as we have a branch in Beirut. Ofcourse, this move led to other international banks to be worried from warka bank and stopped all their credit limits. Above all , he showed it to all our main customers and the exchangers which really caused kayos in our bank. Customers started to withdraw their deposits. At that time we had 245 billion dinars worth of debt to ministry of trade customers were we opened letters of credit on the assumption that the ministry of trade will pay our customers when the goods are received by them. This never happened until this date and customers did not pay to warka bank their dues. We wrote letters to the governor, we wrote letters to prime minister, we wrote letters to the minister of finance, we wrote letters to the economic committee but without any response. No one even cared to listen to us or speak to us. In the bank side we reached the final day of the death sentence for warka bank but Allah was on our side overlooking us. my management team and I would never allow those people to cripple our baby for their personal satisfaction. After a carefully studied plan, the management of the bank did a courageous move in order to get the attention of the central bank and its people and also to prove to the world that we do not have a central bank capable of monitoring exsisting banks. we deficit warka bank account on purpose at the central bank for the amount of 265 billion dinar. Even with this huge deficit , the central bank did not know what was going on. We passed a message to ahmed al jebouri that the account is in deficit and do whatever you want to do and we are not going to do anything unless we have a meeting with governor. This was on a Tuesday afternoon. By Wednesday morning, the central bank was in rampage. No one knew what to do or how did this happen.
I personally had a call from Mr. Ihsan Shamiran who is the chief accountant in the central bank ,who was on a trip to turkey asking me to close the deficit which I totally refused unless I meet the governor and the central bank team to sit with us amd listen to our views and the way we were treated. But in order for me to prove to him that the money was available, we deposited 100 billion into the account. a meeting with the governor was arranged for Saturday. During the said meeting and after give and take and after showing the governor his wrong decisions we managed to get the following;
Open all the branches and start work again and get final approvals after the inspection but we must increase the capital of the bank to 100 billion by 28-2-2010.
Stop paying the remaining penalties and agreed that these monies will be returned later.
Warka bank can participate in the auction.
All the above points will be approved once we repay the deficit by next Monday afternoon of which we did. This really aggravated Mr. jebouri as we have won again. Three weeks later , as Mr. jebouri wanted to take revenge from us, he issue a degree that both the MAKASA and AL-GHITAA AL-QANUNI are considered to be one account which is against the principle of banking and the central bank law. No one could attest to this decision and this really crippled us. this meant that any customer who deposits a cheque , the monies will go to the central bank account which at the end of the day will result in no cash flow to the customers. Above all , this will mean that we will never be able to participate in the central bank auction as the monies will be accredited to this established account until we reach 78 billion dinar which was an impossibility. We fought, we strived , we took the decision to never break down and give ourselves to these people with GOD will.
Warka bank has 20 billion shares in the iraqi Islamic bank registered in various names and companies affiliated to the bank which we sold and managed to cover the deficit in the central bank. this was done in april of 2010. By may of 2010, the issue of basra bank popped up to the scene. What trigged the issue is that Mr. badri with his strong ties with the MUSHRIF AAM of the ministry of finance managed to persuade him that we are doing illegal dealings with the rafidain bank. it back fired on basra bank as it was them who were doing the illegal transactions in collaboration with some officials at the rafidain bank which reached to over 566 billion dinar and not what it is being rumored around being 356 billion. But what rafidain managed to see is that warka bank account was in deficit for 19 billion dinar and this was due to safety cheques that we do in our branches for the government institutions. . Mr. raad told the minister of finance in a recorded meeting that we are part of the game with basra and we also took the money from rafidain. Rafidain bank , from instructions of the minister issued a letter to stop dealing with warka bank as well as freezing all accounts in all banks and institutions. We had a meeting with the minister and persuaded him that the information he had is all wrong and came to the conclusion that if we put assets and shares as collateral, he will authorize the dealing with rafidain again. Within one week , we managed to mortgage for him assets and shares with the vale of 40 billion dinar. But the minister did not keep his word until we managed to pay the debt in full and be in surplus. This was done by 25 june 2010. Until now we did not receive the letter of lifting the freeze of accounts which is crucial for us as our TBI account was also frozen and we have payments for our letters of credit to our customers which needed to be paid.
As with regards to the letter received from the commission which you mentioned, I can assure you it is all fake. If we are defecting our shareholders with false information, then why we sold 20 billion shares and deposited into the central bank where if we wanted , we could have taken the money. who do you think will be the biggest looser. It is me, my management and staff of course. I have 57% of the bank shares. If there is anything that goes wrong , it will be me who will be the most affected. For us to work on central bank rules, we will never be able to reach the level of where we are now. Yes , we made a lot of investments but al hamdullah all are winners. The assets that we bought and the reserves that we put in the balance sheet all it did was to strengthen the solidarity of the bank. if the shares are purchased in companies that 95% owned by the bank , what is the harm in it. the committee just wanted to show how brave they are by putting obstacles in our way trying to push us down. At the end of the day, you will see that we will prove them wrong as usual even if that means going to court and have our rights.
As with regards to the international auditors, I will be more than happy if you can get any reputable company that will accept to do the accounts of warka either in Jordan or iraq if they are available and able to carry the work with reasonable fees.
In conclusion and Honestly speaking , if over 1.2 trillion dinar (one billion dollars) is withdrawn from any bank in the world and no new deposits in a matter of ten months , could they sustain their business. I am sure you can answer this question for yourself. If you are attacked from all parts of the community , could you keep the business running. For your information , just in assets and shares in any worse case scenario we have over 250 billion dinars . Depositors balances are about 400 billion, creditors to the bank in any worse case scenario is 350 billion dinars. I am sure as a researcher, you would say the hell with it all , who needs such hassle and trouble,, I might as well call the day off and get my money back which is worth over 1.8 dinar per share at the minimum. Even with your new subscribed shareholders, there is no way any investment will give them 80% profit margin. also I am sure you are in the stock market for a long time, no other bank gave profits and increased its size as we did in warka bank . We are doing all this because we do not want to be losers .This is not due to me . this is due first to Allah WHO WAS KIND TO US ALL AND GAVE US THE WILL AND STRENGTH TO FIGHT THESE CORRUPT PEOPLE AND TO THE SUPERB MANAGEMENT TEAM AND THE STAFF THAT WORKS AS A FAMILY AND NOT AS IN AN INSTITUTION.
Last but not the least, I thank you for your time reading the true happening of warka bank and will very much appreciate your comments.
May Allah bless you and give you the strength to fight for us against those who want harm to warka bank.
Dear sir, we remain
Saad Sadoon Al-Bunnia
Chairman of the Board
Warka bank for Investment and Finance
From: shwan.taha@gmail.com [mailto:shwan.taha@gmail.com] On Behalf Of Shwan Taha
Sent: Monday, July 05, 2010 12:25 PM
To: ceo
Cc: nbaban
Subject: Rabee Securities_Iraq
Dear Mr. Al-Bunnia,
My name is Shwan Ibrahim Taha, I am the Chairman of Rabee Securities (RS) in Baghdad. Your current emails to our research department and our CEO Mr. Baban were forwarded to me and I would like to take this opportunity to respond to you personally.
As you know, our families go along way, and although I have not met you personally, I am a close friend of many members of your family and I consider them more than family and mentors. My late father was also a brother to your uncles and a close confidant beside being their personal physician. We were and are neighbours in Baghdad.
We at RS cater towards international investors and we thrive to provide the best services to our clients. We do not follow market rumors and present what is on the ground and what we have by means of audited accounts etc. The firm is independent and I, along with members of the firm, are responsible for all decisions that we take.
More than a year ago, when we expanded the firm and started attracting foreign investors, we needed to construct our own index. The criteria for such an index is investability and representation. Warka bank was one of the highest weighted stocks on our index, for all the reasons you mention in your emails and we still do believe that it is a good company. Practically all our investors have shares in Warka, and some of them at substantial weightings. In the recent capital increase we have instructed "all" our investors to subscribe to this increase. I am also an investor and had been for years in Warke and I was the first to subscribe to the rights issue. If as you mention we listen to rumors we would have not subscribed to the issue, for the rumors were abound that the bank is going to fail at the time, but as a principle we decided on facts and not on rumors. However, it came as a shock to us and to our investors that we were the majority of the subscribers to the issue, that the main shareholders did not subscribe and that the whole issue might fail, not because of rumors but because of lack of interest to subscribe to the rights issue. We have many very distressed investors.
The rights issue, or the failure of it, has caused the shares of Warka to remain untradable, the last trading day for Warka was almost 5 months ago. As I mentioned, the companies on the RSISX index have to be tradable to make our index practical. The absence of trading on Warka was also detrimental to the decision especially with the high weighting in the index.
Finally, the very damaging review of the accounts by the ISC, claiming false accounting and demanding the accounts to be re-audited by different parties, made us take the decision and drop Warka from the RSISX.
Please note, that our investors, including myself are shareholders in Warka, and would be for the future. We still believe that it is one of the largest banks in Iraq and should remain so. However, if I could humbly advice you, as I feel obliged and embarrassed to do so, I think what Warka needs today is a good reputable international auditor, PWC, KPMG etc, to set the accounts and the record straight. Also, we need some clarification on the intention of the majority holders vis a vis the rights issue, thus having a clear timeline of when Warka would be traded as the largest private bank in Iraq. We do visit the constituents of the index every six months, and we would be more than happy to add it back pending the above issues being solved.
I hope this email gave you the clarification needed as why we have taken the decision, against our and our investors interests, to drop Warka from the index. If we understood the process wrongly or have been misguided in any of the facts presented, please do let us know. We look forward to increasing our shares in Warka bank and wish it all the success, and hope to meet soon.
I remain humbly yours,
Shwan I. Taha
+90 532 493 8389.
Mohammad K. Issa wrote:
>
> Dear Sir,
>
> Please note this information has been posted by an Iraqi Brokerage firm another competitor in the market where each competitor based on their own evaluation and assessment sets their strategy, tactics and business plan to promote their business and interests in the market attracting cliental to their establishment noting that our bank from day one through its capital increases has been the only company that generated and guaranteed continuous profit and bonus gains to its fine shareholders bringing added value, incentive and profit.
>
>
>
> Our bank currently holds the largest capital and cliental whereby the number of foreign investors are increasing on a daily basis where Warka Bank will resume trading once it finalizes its entire committee procedures and set protocols.
>
>
>
> With regards to our finances it is very important to note that in accordance with standard practice and procedures set in Iraq our bank must submit its finances 30 days prior to holding our general assembly to the CBI, Iraqi Company Registration Office and the Iraqi Securities Commission the related authorities in Iraq to study, review and thoroughly assess our finances where at our general assembly our finances were approved and certified by the CBI, Iraqi Company Registration and Iraqi Securities Commission noting at the said meeting representatives from the Iraqi Securities Commission expressed their thanks and appreciation for finalizing and submitting our finances in accordance with the set requirements and deadline where representatives of the said parties added their seal of approval.
>
>
>
> Although the firm policy of our bank is not to reply to posts and articles posted on the website however our Chairman of the Board – CEO has personally contacted the said company conveying and expressing his thoughts to the information published by the said company.
>
>
> Best regards,
>
>
>
> Mohammad
I also received this email in response to my inquiries:
Dear Sir,
In reply to your e-mail where you are concerned about your investment in warka bank, kindly find below our communication with Mr. Taha who runs the brokerage company and I am sure in due time he will back down on his allegations.
Thank you for writing to me.
Dear sir , we remain.
Saad Sadoon Al-Bunnia
Chairman of the Board
Warka bank for Investment and Finance
From: Saad Al-Bunnia [mailto:ceo@warka-bank-iq.com]
Sent: Monday, July 05, 2010 10:45 PM
To: 'Shwan Taha'
Cc: 'nbaban'; 'nasser'; 'Mohammad K. Issa'; 'haitham'; luay AL-OKAILI; 'Shwan M. Al-Mulla'; Hassan Aldahan; 'gm'; 'haitham'
Subject: RE: Rabee Securities_Iraq
Dear Mr. Taha,
Thank you for your prompt feedback which is very much appreciated knowing the fact that we are dealing with a professional person like you that knows what he is doing.
First and foremost, let me extend my keen regards to Mr. Baban and to all our friends and investors being local or international for having the confidence and faith in warka bank. Please allow me to take some of your valuable time for you to read and understand my points which is basically in a nut shell it is a matter of cash flow issue. I will detail you with all the circumstances and issues related to warka bank in complete honesty and transparency as this is how we work in the bank and for you at the end of the day, to judge and re-think of the situation and give all your support and help to warka bank. whatever is being written down below will be publically announced in a meeting next week to the media, officials and the public. Of course, whatever we are saying is being backed up by documents to show the conspiracy on warka bank.
It all started in mid 2007 when a money transfer company in the name al-tayeb transfer company was incorporated with the support of warka bank in order to have all outgoing overseas transfers to be directed through this company by using warka bank branch network in order to avoid and eliminate any dangerous acts such as money laundering, terrorism and any other matter that the government can use as an instrument to cripple warka bank down and does not jeopardize the warka bank name. The reason for this decision is because I was arrested by the American forces in the year 2005 for ten days under the allegation that I transfer huge amounts of money from iraq to Jordan and lebanon, which did not please some Politian, knowing the fact that all the matter was approved, supervised and controlled by both the central bank of iraq, ministry of defense and of course the American army as they handled actual movement of funds by air in huge amounts. The shareholding structure of al-tayeb company was 25% saad (on behalf of the bank), 25% Raad al-badri who was at that time an employee of the bank , 25% sayed hamad al-musawi , 25% for ahmed al jebouri who is the deputy governor of the central bank of iraq in which his shares were in the name of his nephew and later on transferred partly to his daughter which registered at company registrar ministry of trade.
Things went well in the first hand and a lot of transfers were made. After a couple of months , and after seeing the profitability of the operation , the other three shareholders decided that the company should be independent from the bank and it should establish its own offices and operate on its own without the use of warka. Competition started between the two parties which is a normal healthy practice in any normal economy but unfortunately not in Iraq. Because of the greed of the other party and due to the strength in the position of Mr. ahmed al jebouri, we were stopped from entering the auction once every two months for five days where Mr. jebouri sends a committee to check our books and papers. With our strong management team, we managed to overcome these stoppages and continue our business as normal matter not getting our clients to be affected at all.
In june 2009, Mr. raad al badri , tried many tricks to cripple the bank. Three major cases were compiled against the bank of which all are related to finance of terrorism and illegal actions by the bank. knowing exactly what we are doing which is all 100% legitimate and above board, we managed to prove all the false allegations and the files were closed. Mr. Badri problem was that he wanted us to agree with him on the transfer fees which I personally refused to accept as this will mean the harm of many people who live from such business. For us closing all these dirty files, he managed to get hold of the ministry of finance MUSRIF AL AAM and told him that we pay bribes to government institutions in order to put their funds in warka bank. At that time, we had over 900 billion dinars worth of deposits from various governmental entities in which these funds were used to open letter of credits and contract monies for our clients. Ministry of trade was the major depositor where we pay interest on these deposits as they were not free of charge. By july of 2009 we received letters from all the government entities to withdraw their funds upon the instructions of the MUSREF AL AAM not taking into consideration the effect of the cash flow on the banks as well as the letters of credit opened to their clients. We were pushed to pay these funds even though other banks such as dar al salam refused to return the money until today. A board of directors decision was taken whereby we return the money to the ministries in order to avoid complications such as imprisonment of our staff. what ever happened did not affect the bank as the credibility of warka bank was and still is very high and the move of the competitors did not affect severely the position of the bank.
Knowing the fact that all the above measures did not stop the warka bank machine to stop, ahmed al jebouri managed in a board of directors meeting to take decisions against the bank of which will result in the complete close down of the bank even though it is not according to the by-laws of the central bank as there need certain measures to be taken before such a decision is taken. these points are:
Closing down 57 branches out of the 130 branches under the impression that they do not have final license
80 million dinar fine for each branch
Not allowing us to participate in the cbi auction (which is what ahmed al jebouri really wanted as this will leave the ground open only for his company)
Not allowing us to open branches for the year 2010 and 2011.
With this document in Mr. Raad hand, he started circulating it to all the local banks including to our corresponding banks and the central bank of lebanon as we have a branch in Beirut. Ofcourse, this move led to other international banks to be worried from warka bank and stopped all their credit limits. Above all , he showed it to all our main customers and the exchangers which really caused kayos in our bank. Customers started to withdraw their deposits. At that time we had 245 billion dinars worth of debt to ministry of trade customers were we opened letters of credit on the assumption that the ministry of trade will pay our customers when the goods are received by them. This never happened until this date and customers did not pay to warka bank their dues. We wrote letters to the governor, we wrote letters to prime minister, we wrote letters to the minister of finance, we wrote letters to the economic committee but without any response. No one even cared to listen to us or speak to us. In the bank side we reached the final day of the death sentence for warka bank but Allah was on our side overlooking us. my management team and I would never allow those people to cripple our baby for their personal satisfaction. After a carefully studied plan, the management of the bank did a courageous move in order to get the attention of the central bank and its people and also to prove to the world that we do not have a central bank capable of monitoring exsisting banks. we deficit warka bank account on purpose at the central bank for the amount of 265 billion dinar. Even with this huge deficit , the central bank did not know what was going on. We passed a message to ahmed al jebouri that the account is in deficit and do whatever you want to do and we are not going to do anything unless we have a meeting with governor. This was on a Tuesday afternoon. By Wednesday morning, the central bank was in rampage. No one knew what to do or how did this happen.
I personally had a call from Mr. Ihsan Shamiran who is the chief accountant in the central bank ,who was on a trip to turkey asking me to close the deficit which I totally refused unless I meet the governor and the central bank team to sit with us amd listen to our views and the way we were treated. But in order for me to prove to him that the money was available, we deposited 100 billion into the account. a meeting with the governor was arranged for Saturday. During the said meeting and after give and take and after showing the governor his wrong decisions we managed to get the following;
Open all the branches and start work again and get final approvals after the inspection but we must increase the capital of the bank to 100 billion by 28-2-2010.
Stop paying the remaining penalties and agreed that these monies will be returned later.
Warka bank can participate in the auction.
All the above points will be approved once we repay the deficit by next Monday afternoon of which we did. This really aggravated Mr. jebouri as we have won again. Three weeks later , as Mr. jebouri wanted to take revenge from us, he issue a degree that both the MAKASA and AL-GHITAA AL-QANUNI are considered to be one account which is against the principle of banking and the central bank law. No one could attest to this decision and this really crippled us. this meant that any customer who deposits a cheque , the monies will go to the central bank account which at the end of the day will result in no cash flow to the customers. Above all , this will mean that we will never be able to participate in the central bank auction as the monies will be accredited to this established account until we reach 78 billion dinar which was an impossibility. We fought, we strived , we took the decision to never break down and give ourselves to these people with GOD will.
Warka bank has 20 billion shares in the iraqi Islamic bank registered in various names and companies affiliated to the bank which we sold and managed to cover the deficit in the central bank. this was done in april of 2010. By may of 2010, the issue of basra bank popped up to the scene. What trigged the issue is that Mr. badri with his strong ties with the MUSHRIF AAM of the ministry of finance managed to persuade him that we are doing illegal dealings with the rafidain bank. it back fired on basra bank as it was them who were doing the illegal transactions in collaboration with some officials at the rafidain bank which reached to over 566 billion dinar and not what it is being rumored around being 356 billion. But what rafidain managed to see is that warka bank account was in deficit for 19 billion dinar and this was due to safety cheques that we do in our branches for the government institutions. . Mr. raad told the minister of finance in a recorded meeting that we are part of the game with basra and we also took the money from rafidain. Rafidain bank , from instructions of the minister issued a letter to stop dealing with warka bank as well as freezing all accounts in all banks and institutions. We had a meeting with the minister and persuaded him that the information he had is all wrong and came to the conclusion that if we put assets and shares as collateral, he will authorize the dealing with rafidain again. Within one week , we managed to mortgage for him assets and shares with the vale of 40 billion dinar. But the minister did not keep his word until we managed to pay the debt in full and be in surplus. This was done by 25 june 2010. Until now we did not receive the letter of lifting the freeze of accounts which is crucial for us as our TBI account was also frozen and we have payments for our letters of credit to our customers which needed to be paid.
As with regards to the letter received from the commission which you mentioned, I can assure you it is all fake. If we are defecting our shareholders with false information, then why we sold 20 billion shares and deposited into the central bank where if we wanted , we could have taken the money. who do you think will be the biggest looser. It is me, my management and staff of course. I have 57% of the bank shares. If there is anything that goes wrong , it will be me who will be the most affected. For us to work on central bank rules, we will never be able to reach the level of where we are now. Yes , we made a lot of investments but al hamdullah all are winners. The assets that we bought and the reserves that we put in the balance sheet all it did was to strengthen the solidarity of the bank. if the shares are purchased in companies that 95% owned by the bank , what is the harm in it. the committee just wanted to show how brave they are by putting obstacles in our way trying to push us down. At the end of the day, you will see that we will prove them wrong as usual even if that means going to court and have our rights.
As with regards to the international auditors, I will be more than happy if you can get any reputable company that will accept to do the accounts of warka either in Jordan or iraq if they are available and able to carry the work with reasonable fees.
In conclusion and Honestly speaking , if over 1.2 trillion dinar (one billion dollars) is withdrawn from any bank in the world and no new deposits in a matter of ten months , could they sustain their business. I am sure you can answer this question for yourself. If you are attacked from all parts of the community , could you keep the business running. For your information , just in assets and shares in any worse case scenario we have over 250 billion dinars . Depositors balances are about 400 billion, creditors to the bank in any worse case scenario is 350 billion dinars. I am sure as a researcher, you would say the hell with it all , who needs such hassle and trouble,, I might as well call the day off and get my money back which is worth over 1.8 dinar per share at the minimum. Even with your new subscribed shareholders, there is no way any investment will give them 80% profit margin. also I am sure you are in the stock market for a long time, no other bank gave profits and increased its size as we did in warka bank . We are doing all this because we do not want to be losers .This is not due to me . this is due first to Allah WHO WAS KIND TO US ALL AND GAVE US THE WILL AND STRENGTH TO FIGHT THESE CORRUPT PEOPLE AND TO THE SUPERB MANAGEMENT TEAM AND THE STAFF THAT WORKS AS A FAMILY AND NOT AS IN AN INSTITUTION.
Last but not the least, I thank you for your time reading the true happening of warka bank and will very much appreciate your comments.
May Allah bless you and give you the strength to fight for us against those who want harm to warka bank.
Dear sir, we remain
Saad Sadoon Al-Bunnia
Chairman of the Board
Warka bank for Investment and Finance
From: shwan.taha@gmail.com [mailto:shwan.taha@gmail.com] On Behalf Of Shwan Taha
Sent: Monday, July 05, 2010 12:25 PM
To: ceo
Cc: nbaban
Subject: Rabee Securities_Iraq
Dear Mr. Al-Bunnia,
My name is Shwan Ibrahim Taha, I am the Chairman of Rabee Securities (RS) in Baghdad. Your current emails to our research department and our CEO Mr. Baban were forwarded to me and I would like to take this opportunity to respond to you personally.
As you know, our families go along way, and although I have not met you personally, I am a close friend of many members of your family and I consider them more than family and mentors. My late father was also a brother to your uncles and a close confidant beside being their personal physician. We were and are neighbours in Baghdad.
We at RS cater towards international investors and we thrive to provide the best services to our clients. We do not follow market rumors and present what is on the ground and what we have by means of audited accounts etc. The firm is independent and I, along with members of the firm, are responsible for all decisions that we take.
More than a year ago, when we expanded the firm and started attracting foreign investors, we needed to construct our own index. The criteria for such an index is investability and representation. Warka bank was one of the highest weighted stocks on our index, for all the reasons you mention in your emails and we still do believe that it is a good company. Practically all our investors have shares in Warka, and some of them at substantial weightings. In the recent capital increase we have instructed "all" our investors to subscribe to this increase. I am also an investor and had been for years in Warke and I was the first to subscribe to the rights issue. If as you mention we listen to rumors we would have not subscribed to the issue, for the rumors were abound that the bank is going to fail at the time, but as a principle we decided on facts and not on rumors. However, it came as a shock to us and to our investors that we were the majority of the subscribers to the issue, that the main shareholders did not subscribe and that the whole issue might fail, not because of rumors but because of lack of interest to subscribe to the rights issue. We have many very distressed investors.
The rights issue, or the failure of it, has caused the shares of Warka to remain untradable, the last trading day for Warka was almost 5 months ago. As I mentioned, the companies on the RSISX index have to be tradable to make our index practical. The absence of trading on Warka was also detrimental to the decision especially with the high weighting in the index.
Finally, the very damaging review of the accounts by the ISC, claiming false accounting and demanding the accounts to be re-audited by different parties, made us take the decision and drop Warka from the RSISX.
Please note, that our investors, including myself are shareholders in Warka, and would be for the future. We still believe that it is one of the largest banks in Iraq and should remain so. However, if I could humbly advice you, as I feel obliged and embarrassed to do so, I think what Warka needs today is a good reputable international auditor, PWC, KPMG etc, to set the accounts and the record straight. Also, we need some clarification on the intention of the majority holders vis a vis the rights issue, thus having a clear timeline of when Warka would be traded as the largest private bank in Iraq. We do visit the constituents of the index every six months, and we would be more than happy to add it back pending the above issues being solved.
I hope this email gave you the clarification needed as why we have taken the decision, against our and our investors interests, to drop Warka from the index. If we understood the process wrongly or have been misguided in any of the facts presented, please do let us know. We look forward to increasing our shares in Warka bank and wish it all the success, and hope to meet soon.
I remain humbly yours,
Shwan I. Taha
+90 532 493 8389.