Kabul Bank Review: Millions of dollars sent abroad
By Sajad - Wed Nov 28 2012, 8:27 pm
The Afghan-based anti-corruption body claimed politicians had amended the list of suspects to be charged over the collapse of Kabul Bank.
The report, which was financed by international donors, offers new details about how the men at Kabul Bank and their friends and relatives got rich off $861 million in fraudulent loans in what the International Monetary Fund has called a Ponzi scheme that used customer deposits and operated under nascent banking oversight in the war-torn country.
The 87-page findings of the foreign-funded inquiry expose a sophisticated network of corruption that saw money smuggled abroad in airline food trays, as well as political interference in criminal proceedings.
The report said $861 million, or 92 per cent of Kabul Bank’s loan book, went to 19 individuals and companies. Among them are key bank shareholders, including Sherkhan Farnood, the former bank chairman and a world-class poker player, former chief executive officer Khalilullah Ferozi, and the brothers of Karzai and first Vice-President Mohammad Qasim Fahim.
Other bank funds — an estimated $66 million — were spent on lavish expenses, cars, rent, bonuses, salary advances and salaries for employees that did not exist
The probe by the government-funded Independent Joint Anti-Corruption and Evaluation Committee named no individuals but revealed two sets of books were kept by Kabulbank, one to satisfy regulators and another tracking the real disbursement of funds through a loan-book scheme for proxy borrowers. They used forged supporting documents, fake business stamps and statements provided by accounting firms complicit in the scam.
Separately a US firm’s audit, leaked to US media on Tuesday, said the money had been funnelled to 19 firms and people linked to the Afghan political elite.
The bank’s collapse triggered a financial crisis, civil disorder and a run on deposits, worrying foreign donors and embarrassing the U.S. and Afghan governments, which had touted its credentials as a modern lender integral to developing a tiny economy crippled by war and mismanagement.