Probe into Kabul Bank crisis completes: official

KABUL): Mismanagement, ignoring warning signs and non-transparent investigation by foreign institutions pushed the country’s largest bank – Kabul Bank — into crisis, an official said on Sunday.

Last year, reports appeared in the media about the bank losing $300 million due to mismanagement, cronyism and dubious lending.

The bank nearly collapsed after revelations that most of its money had been loaned to its politically powerful managers and shareholders and their associates to fund reckless investments and beachfront mansions in Dubai.

Subsequently, two senior shareholders were removed and the government took the bank’s control.

On April 11, President Hamid Karzai said foreign advisers shared a huge part of the blame for the crisis and would face criminal investigation.

“Hundreds of millions of dollars have been paid to foreign advisors and institutions to help Afghanistan‘s banking system, but they failed in their task,” the president told reporters.

Currently, 207 people, including some shareholders, parliamentarians and ministers had to repay about $912 million, (42.20 billion afghanis) to the bank, said chairman of the High Office of Oversight and Anti-corruption, Azizullah Ludin.

Speaking at a press conference in Kabul, he said an investigation into the bank crisis had been completed and a report submitted to President Hamid Karzai.

He hoped nearly $347 million would be taken back from the borrowers. Some of them had provided documents of their properties as guarantee against loans and if they failed to repay, their properties would be seized, Ludin said.

About transfer of money abroad, , he said the Kabul Bank officials had sent money outside the country contrary to regulations and without any advice from the Da Afghanistan Bank.

On April 27, Governor of Da Afghanistan Bank Abdul Qadir Fitrat named some of Kabul Bank shareholders who had allegedly misused depositors’ money.

Sher Khan Farnood, Khalil Ferozi, Mohammad Hussain Fahim, Mahmood Karzai, Gulbahar Habibi, Abdul Ghafar Dawi, Mohammad Ibrahim, Sofi Nisar, Tahir Zahir, Daud Nasim were among those violating Article 34 of the bank laws by misusing customers’ deposits, he has said.

Without giving details, Ludin said assets of some stakeholders had been frozen and travel restrictions placed on them

On April 27, Kabul Bank’s new governor Massoud Ghazi told Wolesi Jirga that Farnod had fraudulently received $504 million in loan, Ferozi $66.9m, Fahim $78m, Mahmood Karzai $22m Habibi $39.7m, Dawi $37m, Ibrahim $9m, Sofi Nisar $14m and Zahir $11m.

An amount of $49 million had been recovered from them, said Ghazi, who added $450m loans were guarantee based.

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