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20 get jail terms in Kabul Bank scam

20 get jail terms in Kabul Bank scam

Mar 05, 2013 - 13:02

KABULinfo-icon (PANinfo-icon): A special tribunal on Tuesday, convicting 20 accused in the Kabul Bank loan scandal, handed down prison sentences to former executives and ordered them to return hundreds of millions of dollars they had stolen.

Ex-chairman of Kabul Bank Sher Khan Farnoud and former chief executive officer Khalilullah Frozi were found guilty of pinching $278 million and $530 million respectively.

While announcing the long-awaited verdict on the big-time banking scam, Judge Shams-ul-Rahman Shams sentenced the two executives to five years in jail.

Abdul Qadeer Fitrat, the former central bank governor who has fled to the US, was convicted in absentia. He was slapped with 30 months imprisonment term. Of those sentenced, four are Indian citizens.

The scandal left Afghanistaninfo-icon’s largest private lender teetering on the verge of collapse in 2010, prompting the government to take over part of the troubled bank and inject more than $800 million into it.

Reports put at $937.7 million the off-book loans issued to a number of people, including stakeholders, who allegedly used the funds to purchase homes in Britain, the UAE and elsewhere.

Of 21 accused in the case, 16 were present in the court. Some of them were ordered imprisoned and others fined. "These 21 individuals are going to be sentenced because of their role in the crisis," the judge ruled.

He said another 20 people linked to the scandal were still being probed, indicating more indictments. However, several other powerful people -- connected to the scandal as shareholders -- were not charged.

The Joint Anti-corruption, Monitoring and Evaluation Committee (MEC) said in a report in November last year that 92 percent of the loans were extended to 19 individuals and businesses. Under the relevant law, defendants can challenge the three-judge panel’s ruling.

Former Kabul Bank deputy chief Mohibullah Sapi has been jailed for 18 months for his role in the crisis and failure to report the irregularities to the authorities, according to the judge.

New Kabul Bank head Masood Khan Moosa Ghazi was imprisoned for three years for his complicity in the illegal withdrawal of $5 million. He was ordered to return the money.

Under the judgment, Mohammad Afzal -- a member of the bank’s monitoring team -- and operations chief Abdul Basir were jailed for four years each.

Also indicted and jailed in the case are bank officials Mohammad Tariq Miran, Kamal Nasir Koror, Mahboob Shah Frotan, Aminullah Khair Andesh, Zafarullah Faqiri, Sher Agha, Bismillah, Mohammad Qasseem Rahimi and Mohammad Arif.

Audit chief Amar Ra Gopal, loan committee head Ram Chandral, Amanullah and Asmatullah Baig had been sentenced each to four years in jail, said Shams, who explained the judgment could be appealed.

Reacting to the ruling, Farnoud denied his involvement in the scandal, blaming Ferozi and Vice-President Qasim Fahim’s brother Mohammad Haseen Fahim for the multi-million dollars fraud.

He claimed: “Both of them have levelled wrong allegations against me. Initially, they blamed me for stealing $650 million, but later they brought the figure down to $294 million.” 

Farnoud alleged Huseen had obtained hefty loans from the bank for the establishment of the Gas Group Company. Frozi, who now owns $300 million, was once a common worker of the bank, according to him.

“The government could recover 50 percent of the money from Kabul Bank equipment worth $100 and half of it belongs to me,” Farnoud said, confirming he had already returned $65 million loans to the audit department.

Farnoud said the department had auctioned his home for $45 million in the UAE and confiscated two more houses there. The department also seized 50 percent of his shares in the Gulbahar Tower and two of his shops in the Kabul currency market.

In response to the allegations, Frozi said: “I don’t want answer what Farnoud said. But I have this document showing that he transferred $ 400 million to Russia.”


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