KABUL - The acting chief financial officer and other Pakistani employees of Kabul Bank have fled Afghanistan amid an investigation into the scope of the bank's reckless lending and allegations that its shareholders paid large bribes to many senior Afghan officials, according to Afghan officials and others familiar with the issue.
The executive, Rana Tayyab Tahir, and his colleagues in the finance department of Afghanistan's largest and most sophisticated bank fled to Pakistan on Jan. 14, a move some said was made out of fear for their lives and possible arrest in Afghanistan.
Afghan authorities have called in several bank managers, including foreigners, for questioning and detained some in southern Afghanistan's Helmand province in connection with illicit transfers of bank funds.
Sherkhan Farnood, a world-class poker player who founded Kabul Bank and served as its chairman until his ouster in September, is now under effective house arrest, along with former chief executive Khalil Fruzi. Both are barred from leaving Afghanistan.
But other shareholders who took out million-dollar loans, including Mahmoud Karzai, the brother of President Hamid Karzai, and Haseen Fahim, the brother of Vice President Mohammad Qasim Fahim, have been allowed to leave the country.
Tahir and his colleagues could not be reached for comment. Two bank insiders said authorities appear to be making managers into scapegoats for the powerful shareholders who withdrew hundreds of millions of dollars from the bank for personal use.
Investigators with Afghanistan's Central Bank and the attorney general's office have begun the complicated process of unraveling the web of illicit loans to politically connected shareholders and allegations of bribery to members of Karzai's administration.
Fruzi doled out millions of dollars to cabinet members, lawmakers and other influential Afghans, according to former bank officials and investigators, and used bank money to finance Karzai's 2009 election campaign.
"Nearly everyone in the cabinet got money from the bank," said a person familiar with the investigation.
Fruzi could not be reached for comment. Farnood, reached by telephone, said he was not allowed to comment.
Several people involved in the investigation say they do not believe the attorney general's office will attempt to prosecute the powerful shareholders. The investigation, they said, had been stalled by a lack of technical capacity to understand the transactions and by political pressure from President Karzai's office.
Last year, the U.S. government pressed Afghans to accept an independent forensic audit of Kabul Bank by an international accounting firm, but Karzai's government resisted. This month, Afghan Finance Ministry officials told Western officials that they would move forward with the forensic audit, under their control, and they have begun accepting bids.
Kabul Bank's near-collapse in September prompted a Central Bank takeover and exposed a culture of backroom favors for Afghanistan's ruling elite.
In those precarious days, depositors mobbed Kabul Bank and withdrew an estimated $800 million in about two weeks, according to sources familiar with the bank. The panic prompted the Afghan government to pour $450 million into the bank's coffers to stave off collapse.
Afghan and Western officials believe the bank has now stabilized because of the financial support, but say serious risks remain for it and other banks in Afghanistan.
Kabul Bank's owners, as well as U.S. and Afghan officials, have long acknowledged the central problem: Shareholders in Kabul Bank were allowed to take out vast loans and not repay them.
The bank lent out as much as $967 million, about 80 percent of which went to shareholders, often registered in the names of relatives or associates, which was used to invest in other businesses, according to estimates from Afghan and Western officials.
The loan figure does not necessarily represent losses at the bank, if the loans are repaid. But Afghan authorities have had problems collecting. Some of the shareholders have repaid small portions of the loans and agreed to payment schedules.
Some bank shareholders accuse Farnood of taking the largest share of the loans, nearly $470 million. But he has disputed that figure and told investigators that many loans to other people who failed to pay were registered in his name. Farnood has argued, using bank documents, that more than $300 million of this total was borrowed by others, according to a bank insider.
Since the crisis last year, the Central Bank has been struggling to regain control of assets purchased with bank money. These include at least a dozen luxury villas on Palm Jumeirah, a high-end real estate development in the Persian Gulf.
Most of the property in Dubai, where values plummeted after the 2008 financial crisis, was registered in the name of Farnood or his wife. The couple has agreed to transfer the property to Kabul Bank, but legal complications in Dubai have prevented that from happening.
Higgins reported from Hong Kong.