Editor in Chief: Moh. Reza Huwaida Thursday, March 28th, 2024

Karzai Orders Inquiry in Kabul Bank’s Losses

Karzai Orders  Inquiry in Kabul Bank’s Losses

KABUL - Afghan President Hamid Karzai ordered the appointment of a special prosecutor and tribunal to investigate the near-collapse of Kabul Bank.
Karzai also ordered that hundreds of millions of dollars in outstanding loans be repaid in two months, The New York Times reported Friday.

Investigators said most of the loans were made to political insiders, including Karzai's brother Mahmoud, and weren't expected to be repaid.

Regulators seized the bank, once the country's largest financial institution, in August 2010 after it was misused by shareholders who gave loans to themselves, friends, relatives and business associates.
Karzai's actions came about a month before Afghanistan's foreign backers are to meet in Chicago.

An Afghan central bank official said Thursday authorities also were tightening the terms under which the bank's two largest shareholders, who have ties to government officials and high-powered business officials, are being held. Sherkhan Farnood, the bank's founder, and Khalilullah Frozi, its former chief executive officer, were arrested last summer, jailed for a few months then released purportedly to help investigators search for missing money. The two now must to spend their nights in prison per the original terms of their release.

Western officials in Kabul told the Times they were adopting a wait-and-see stance to Karzai's decisions.

The U.S. Embassy said in a statement it "noted with interest" Karzai's decisions on appointing a special prosecutor, impaneling a tribunal and calling for the repayment of loans.

"We look forward to seeing the results of these decisions, especially the return of assets stolen from Kabul Bank and prosecution of those responsible for the crisis," the statement said. (UPI)