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President to personally assess deal with Ferozi

President to personally assess deal with Ferozi

Nov 14, 2015 - 21:44

KABULinfo-icon (Pajhwok): President Ashraf Ghani wants to personally assess the Memorandum of Understanding (MoU) signed with a major Kabul Bank debtor and would decide on the basis of the assessment, the Presidential Palace on Saturday.

Addressing a press conference, deputy presidential spokesman Syed Zafar Hashimi rejected rumours that Khalilullah Ferozi had been released from jail after launching Hoshmand Town (Smart Town) project.

The government has signed a MoU on the township project with Ferozi and Nabizada Wardak Ltd in order to accelerate the process of recovering loans taken by the debtors.

But President Ghani later called off the deal ordered the authorities concerned to assess legal aspects of the contract with the convicted person.

Former Kabul Bank chief executive and major defaulter Khalilullah Ferozi, who was convicted last year in the massive banking fraud scandal, launched work on an ambitious township project -- involving an initial investment of $98 million -- in the heart of the nation’s capital.

Ferozi and Sher Khan Farnood -- founder of what has come to be dubbed as a piggy bank -- had been convicted on charges of defrauding the Kabul Bank of nearly a billion dollars. Each was sentenced to 10 years in jail in December 2014. One of the leading Afghan tycoons, Ferozi is said to be serving his jail term at night under a deal with the government.

Once the country’s largest lender, the Kabul Bank plunged into deep crisis in 2009, when it lost $987 million in fraudulent property deals, huge off-book loans and credit to fake corporations. The big-time scam prompted the government to take over the bank’s affairs and change rename it as New Kabul Bank.

Later, the government announced a $825 million bailout plan for the bank, whose scandal soon came to be the talk of the town. The scam angered international donors besides generating a heated debate in Parliament. Of $987 million stolen, the government claims having recovered $437 million. Twenty-four defaulters returned their debts until July.

Last week, the Wolesi Jirgainfo-icon complaints commission claimed Ferozi paid $7 million for signing the township contract and his release with mediation of the president’s legal advisor and others allies of the president.

“The president will personally assess the nature of the MoU and will decide on the basis of his assessment and will share updates with the media in the near future,” Hashimi said, pointing to the termination of the agreement by the president.

Of $970 million embezzled money from Kabul Bank, $403 million or nearly 50 percent has been recovered from the debtors, he said.



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