No Progress in Kabul Bank’s Graft Case
Kabul Bank’s loans worth $220 million have been recovered by a special commission set to settle the cases of graft and irregularities in the Bank. Noorullah Dilawari, the Central Bank governor told reporters that about $173 million has been recovered from selling defaulters’ properties in Dubai and Kabul. The once largest private bank in Afghanistan went bankrupt about two years ago after the main shareholders and executives of the bank illegally withdrew loans of $835 million and invested the money in construction projects in Dubai. After the bank went bankrupt, the central bank intervened and took over the bank. A special tribunal set up to pursue the case of the bank, convicted former chairman SherKhan Farnoud and CEO Khalilullah Ferozi to prison and repay of the money they have illegally withdrawn.
The case of the Kabul Bank is considered as the biggest financial scandal in the world compared to the size of the Afghanistan’s economy. It involves more than 22 people and some notable figures with family ties with top government officials including President Karzai and his vice president Qasim Fahim’s brothers. At the time, bankruptcy of Kabul Bank threatened the whole financial system of Afghanistan which was already teetering due to dependence on foreign aid. Dealing with the crisis is considered as the benchmark for actions and determination of the government of Afghanistan in fighting graft and corruption.
Since family members of top government officials are involved in the graft case, many are skeptical about the fate of the graft case and whether the government would effectively deal with the biggest financial scandal of modern Afghanistan. Though SherKhan Farnoud and Khalilullah Ferozi, former officials of the Kabul Bank, received sentences of five-year terms in prisons, Haseen Fahim and Mahmood Karzai so far have safely escaped from the justice. The two main shareholders of the Kabul Bank also claimed that Fahim and Karzai are the main wrongdoers in the bank’s case. But whatever the size of their involvement in graft case, they should be taken accountable according to the law, disregard of their power connections. Otherwise, the people would lose confidence to the capability of the government and the judicial system of Afghanistan in dealing with the crisis.
So far, the special tribunal set up for dealing with the case, have been largely unable to progress in recovering the money. About $220 million that is recovered so far is indicating that the tribunal will be unable to recover even half of the money during next five years. In addition to that, the process would be doomed to failure as would certainly be further involved with corruption and compromises in the future. The failure to recover the money withdrawn illegally from Kabul Bank in time would help grow illegal activities in the economy which would certainly draw back the economy from growth in the next decades.
Even more importantly, the ability of the government to deal with the graft case is closely connected to the continued delievery of aid by the international community in the next years. The government of Afghanistan needs to prop up the economy by foreign aid and the donor countries have made it clear their aid assistance for Afghanistan is abosolutely conditional based on effectiveness of the anti-graft programs. For the continued assistance of the international community, Afghanistan has no option but to effectively fight corruption and graft.