Afghanistan arrests two bosses of scandal-hit bank

Last Updated: Friday, July 1, 2011 - 23:11

Kabul: Afghan authorities have arrested two
former executives of Kabul Bank in connection with a scandal
at the troubled country`s biggest private lender.

Sherkhan Farnood and Khalilullah Ferozi, the bank`s
former chairman and chief executive, had initially been held
under a loose form of house arrest in Kabul but had now been
taken into detention.

"We detained them and transferred them to the detention
centre of Kabul province," Afghanistan`s deputy attorney
general Rahmatullah Nazari told local television.

Wednesday`s move followed the flight of Afghanistan`s
central bank governor Abdul Qadir Fitrat to the United States,
Nazari added, without giving details.
Fitrat said he fled abroad this week in fear of his life
but some Afghan officials have claimed the move was linked by
a possible investigation into his role in the Kabul Bank case
by the attorney general.

Farnood, an international poker player who founded the
bank in 2004, and Ferozi lost their jobs last year over nearly
a billion dollars of off-the-books loans to executives, many
of them with links to President Hamid Karzai`s government.

The scandal has led to hundreds of millions of dollars
of international aid to Afghanistan being withheld this year.

This is because of the current lack of an International
Monetary Fund (IMF) assistance programme to Afghanistan --
effectively a rubber stamp for foreign aid donors.
The IMF wants Karzai`s government to take steps to
ensure a similar scandal does not happen again before agreeing
a new programme. But its demands have caused serious tensions
with Kabul.

Bureau Report



First Published: Friday, July 1, 2011 - 23:11

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