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Kabul Bank audit to start next week: Fitrat

Kabul Bank audit to start next week: Fitrat

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On
May 30, 2011 - 18:30

KABULinfo-icon (PANinfo-icon): An audit about the issue of country's biggest private-sector financial institution, Kabul Bank, would start next week, the central bank governor announced on Monday.

Funded by Canada and the United Kingdom, the audit would be completed in six months, Da Afghanistaninfo-icon Bank chief Abdul Qadir Fitrat told a news conference in Kabul.

All issues, including a cash withdrawal scandal that pushed the bank into a serious crisis and deposit sources, would be dealt with, the governor said.

On last Wednesday, a senior British official said the United Kingdom, responding to a request from Afghan government, was ready to fund the audit.

"We were requested by Afghan authorities to support them in undertaking a forensic audit of Kabul Bank, and we are very happy to support them," the acting head of the UK Department for International Development (DFID) said

Andrew Kidd added that addressing the bank's situation was critical and Afghan authorities were interested in finding out what happened within the bank.

The Kabul Bank audit department head, Mohammad Nisar Yousafzai, said that $60 million (2.77 billion afghanis) of the $579 million loans had been recovered so far.

Some 207 people, including shareholders, parliamentarians and ministers, had yet to return $912 million, said the chairman of the High Office of Oversight and Anti-corruption, Azizullah Ludin on Sunday.

Ludinsaid mismanagement, ignoring warning signs and non-transparent investigation by foreign institutions had pushed the bank into crisis.

But Fitrat rejected the investigation conducted by the High Office of Oversight and Anti-corruption. He cited three reasons for rejecting the probe -- bypassing the central bank, differences among senior officials and the involved of biased investigators.

Last year, reports appeared in the media about the bank losing $300 million to mismanagement, cronyism and dubious lending. The bank nearly collapsed after revelations that most of its money had been loaned to politically powerful managers and shareholders and their associates to fund reckless investments.

Subsequently, two senior shareholders were removed and the government took the bank's control. On April 11, President Karzai said foreign advisors shared a huge portion of the blame for the crisis and would face criminal investigation.

"Hundreds of millions of dollars were paid to foreign advisors and institutions to help Afghanistan's banking system, but they failed in their task," the president said.

frm/mud

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