Afghanistan’s top banker, Abdul Qadeer Fitrat, who is alleged to have played a role in the country’s largest financial scandal, has fled to the U.S.
The, now, former-governor of Afghanistan’s Central Bank is holed up in a Northern Virginia hotel. Contacted by phone, Fitrat said he left Afghanistan because his life had been threatened and that the Karzai government was refusing to prosecute those allegedly involved in fraudulent loans.
The near collapse of Kabul Bank, the national’s largest private bank, involved years of malfeasance by politically connected bank shareholders, including the brothers of both Mr. Karzai and the first vice president, Muhammad Qasim Fahim, who along with other shareholders took more than $900 million in loans, many of them interest free with no repayment plans, writes the New York Times, which goes on to add:
To read the rest of this article, visit Forbes.com, where it was originally published.
The, now, former-governor of Afghanistan’s Central Bank is holed up in a Northern Virginia hotel. Contacted by phone, Fitrat said he left Afghanistan because his life had been threatened and that the Karzai government was refusing to prosecute those allegedly involved in fraudulent loans.
The near collapse of Kabul Bank, the national’s largest private bank, involved years of malfeasance by politically connected bank shareholders, including the brothers of both Mr. Karzai and the first vice president, Muhammad Qasim Fahim, who along with other shareholders took more than $900 million in loans, many of them interest free with no repayment plans, writes the New York Times, which goes on to add:
The bank’s troubles and the government’s failure to deal with them was one of several issues that caused the International Monetary Fund to suspend its program with Afghanistan, which had the effect of halting the country’s access to some foreign aid money and threatens to reduce sharply the country’s ability to access the Afghan Reconstruction Trust Fund, administered by the World Bank.A few weeks back the Guardian followed the corrupt and moneyed trail that ensnared both businessmen and politicians, and brought Afghanistan to the brink of financial ruin:
The most notorious of Kabul Bank’s “investments” are in Dubai, where [Khalilullah Ferozi, the former chief executive of the bank] says $160m was spent on 35 luxury villas on the Palm Jumeirah, the artificial sand banks that jut out in “fronds” into the Arabian Sea. Many of the houses were registered in [the bank's former chairman, Sherkhan Farnood's] name and handed out to bank shareholders. I visited house No1 on Frond O – a huge five-bedroom “Riviera”-style mansion occupied by Ferozi. Others owned by the bank showed every sign of occupation – pools were full of water, and cushioned garden furniture was set up in the sticky summer heat.
It was in these houses that Afghan MPs were entertained with drink and “Russian girls”, according to one Afghan intelligence official, who says the bank deliberately sought to compromise the politically powerful.
Ferozi frankly admits that millions of dollars were lost on these villas after Dubai’s real estate bubble burst in 2008. He firmly pins the blame on Farnood (who promised to answer my questions by email, but never did), saying most of the disastrous lending, particularly in Dubai, happened before he became CEO.The 18-month Kabul Bank scandal and the crony-capitalism it revealed to be endemic throughout Afghanistan has worsened the already tense relationship between the Afghan government and the United States, which has led the nearly 10-year-old war here to rout the Taliban and al Qaeda and is now beginning a partial military withdrawal.
To read the rest of this article, visit Forbes.com, where it was originally published.
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