Afghanistan’s new president has reopened an investigation into the 2010 theft of US$1 billion from Kabul Bank, a lender that had assets including luxury villas on Dubai’s Palm Jumeirah.
The president, Ashraf Ghani Ahmadzai, ordered the attorney general to start the prosecution of shareholders and others involved in the case within 15 days, the presidential palace in Kabul said.
“This is a fair measure in the fight against corruption, and we will try to meet the deadlines,” the Afghan central bank governor, Noorullah Delawari, told Bloomberg News. “Such serious measures can help recover the rest of the loans.”
Afghanistan’s special tribunal on Kabul Bank, which was forced into bankruptcy in 2011, has sought to expedite the sales of the bank assets, starting with those in Dubai. On the top of the list are eight properties on the Palm Jumeirah worth a total of more than Dh119 million.
Three villas are already known to have been sold by 2012 – one worth Dh22.5m, another for Dh30.8m, and a house worth Dh10.7m. At the time, eight were set to be put to auction by Dubai authorities.
Kabul Bank experienced a run on deposits last year after the revelation that shareholders had used it as their personal funding vehicle. The central bank, known as Da Afghanistan Bank, was forced to intervene and appoint a government official as the bank’s chief executive.
According to a US report published in March 2012, about $900 million in loans were made to bank officers and insiders – including shareholders – with little or no collateral. The figure amounts to 94 per cent of all outstanding loans.
The central bank reported that among the loan recipients was Mahmoud Karzai, the brother of the president at the time, Hamid Karzai, who owned several properties in Dubai.
In June of 2012, the government tribunal handling the case handed out 21 criminal indictments relating to the theft of monies from the bank.
Among the most notable figures indicted were Sherkhan Farnood, the bank’s former chairman, and Khalilullah Frozi, the former chief executive. The charges included embezzlement, money laundering and fraud.
mkassem@thenational.ae
Follow The National's Business section on Twitter
