Top Afghan banker flees country, Karzai government says

June 27, 2011

— Afghanistan’s top banker, who is alleged to have played a role in the failure of the nation’s largest private lender, has fled the country, a spokesman for President Hamid Karzai said Monday.

Karzai spokesman Waheed Omar said Abdul Qadir Fitrat had not notified the Afghan government of his resignation. But he said that Fitrat was named in a report sent Monday to the Afghan attorney general’s office as someone possibly responsible for the failure of Kabul Bank.

In a telephone interview from a Northern Virginia hotel, 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.

“My life has become completely endangered,” Fitrat said. “Since I exposed the fraudulent practices on April 27 in parliament, I have received information about threats on my life.” He said he has permanent resident status in the United States and would not be returning to Afghanistan.

The former bank governor said he asked 10 months ago for the Karzai government to prosecute the alleged fraud.

“To date, there is no information of any credible plan to try and prosecute these suspects for the crimes they have allegedly committed, Fitrat said.

Kabul Bank, Afghanistan’s largest private financial institution, nearly collapsed last year because of mismanagement and questionable lending practices.

The bank — now under the control of Afghanistan’s central bank — became a symbol of the country’s cronyism and deep-rooted corruption. It is now considered a bellwether on attempts to root out patronage and show accountability to world financial institutions, such as the International Monetary Fund.

Afghanistan has stepped up efforts to recover hundreds of millions of dollars in fraudulent loans made by Kabul Bank, which has close ties to Afghanistan’s ruling elite.

The former chairman of Kabul Bank, Sherkhan Farnood, a world-class poker player who raised money for Karzai’s reelection campaign, owned 28 percent of the bank. A brother of one of Afghanistan’s two vice presidents was once a shareholder, and Karzai’s eldest brother, Mahmoud Karzai, had owned 7 percent.

Besides buying property in Dubai, the shareholders of Kabul Bank took out loans to invest in an airline, fuel and gas companies, and two shopping malls in Kabul, Fitrat said earlier this year.

A report released in May by Afghanistan’s anti-corruption office showed that about $467 million worth of outstanding loans had been made without appropriate documentation or collateral. A recent report by the inspector general for the U.S. Agency for International Development estimated that fraudulent loans diverted $850 million to bank insiders.

— Associated Press

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