Top Afghan Banker Flees 'In Fear Of Life'

Top Afghan Banker Flees 'In Fear Of Life'

Afghanistan's top banker has fled the country after being summoned for questioning over the failure of the nation's largest commercial bank.

President Hamid Karzai 's spokesman Waheed Omar said central bank boss Abdul Qadir Fitrat had not informed the government of his resignation.

A report handed to the Afghan attorney general's office on Monday named Mr Fitrat as someone potentially responsible for the failure of Kabul Bank, Afghanistan's largest private financial institution.

The banker said he had left because his life was at risk and that the Karzai government had refused to prosecute those allegedly involved in fraudulent loans.

Speaking by phone from a US hotel, he said: "My life has become completely endangered.

"Since I exposed the fraudulent practices on April 27 in parliament, I have received information about threats on my life."

Mr Fitrat has permanent resident status in America and says he will not be returning to Afghanistan.

The former bank governor said he asked the government to prosecute those involved in the alleged fraud 10 months ago.

Kabul Bank nearly collapsed last year because of mismanagement and questionable lending practices.

It plays a key economic role in handling payrolls for government workers and security forces and has close ties to the ruling elite.

But the bank became a symbol of the country's cronyism and deep-rooted corruption and is now under the control of the Afghan central bank.

Its former chairman Sherkhan Farnood, a world-class poker player who raised money for Karzai's re-election campaign, owned 28%.

A brother of one of Afghanistan's two vice presidents was once a shareholder, and Mr Karzai's eldest brother, Mahmood Karzai, had owned 7%.

The scandal weakened confidence in Afghanistan's financial system and has prevented the International Monetary Fund from completing a new program for the country.

Afghanistan has stepped up attempts to recover hundreds of millions of dollars in fraudulent loans made by the institution.

A report by Afghanistan's anti-corruption office showed about \$467m of outstanding loans were made without appropriate documentation or collateral.

A recent USAID inspector general report estimated that fraudulent loans diverted \$850m to bank insiders.

Afghan officials blamed the central bank's weak oversight of Kabul Bank for its demise but Mr Fitrat rejected those allegations last month.

The central bank chief said he asked for forensic auditing help from the IMF and the US Treasury Department after hearing that some used the loans to buy luxurious mansions in Dubai.

Other shareholders were said to have used the money to invest in risky prestige projects like an airline and shopping malls in Kabul.

Mr Fitrat claimed that more than half of those who had benefited from the loans continued to be able to move freely in an out of the country despite attempts to impose a travel ban.

The IMF has been reluctant to extend new credit to Afghanistan in the wake of the scandal.

The UN has said some \$70m in spending for government activities could be withheld without IMF support.

International allies and the head of the central bank have called for the government to prosecute anyone involved in fraud or other illegal activity at the bank.

But the investigatory commision said any decision on who to take to court would be made by the president, Mr Karzai.

His administration has previously blocked attempts to go after his close associates for corruption or misconduct.

By using Yahoo you agree that Yahoo and partners may use Cookies for personalisation and other purposes