President Orders Kabul Bank Case Reopening
President Ashraf Ghani Ahmadzai on Wednesday issued a decree, directing relevant state institutions to immediately address the Kabul bank issue and restitute its assets.
The new decree is enforceable at once in accordance with Article 64 of the constitution. A statement from the Cabinet Secretariat said the presidential orders were aimed to recover the bank’s loans and stolen funds.
Once the country’s largest lender, the bank plunged into deep crisis in 2009, when it lost $835 million in fraudulent property deals, massive off-book loans and credit to fake corporations, prompting the government to take over the bank’s affairs.
Sher Khan Farnoud, the bank’s founder and chairman, and then CEO Khalilullah, are listed among the nearly two dozen people accused of involvement in the big-time fraud that pushed the institution to the brink of collapse.
The scandal, which surfaced in 2010, prompted the International Monetary Fund (IMF) to temporarily suspend hundreds of millions of dollars in international aid to Afghanistan.
Determined to eradicate corruption and introduce institutional reforms on a priority basis, Dr. Ahmadzai directed:
1- The Supreme Court to reopen the Kabul bank case immediately and task prosecutor with reviewing and deciding the case in light of documents and evidence within one and a half month;
2- The Attorney General Office (AGO) and other relevant departments to cooperate with the top court in finding evidence without any delay;
3- The AGO to investigate shareholders and other accused and submit its findings to the court within 15 days;
4- The AGO to oversee the judgment of the primary court and detain the convicts within three days;
5- Kabul Bank officials to set a clear schedule for completing restitution of the bank’s assets within 10 days;
6- The Kabul Bank to summon defaulters who have not yet acknowledged receiving loans. The AGO, Ministry of Interior and other relevant departments to cooperate with the Kabul Bank administration in recovering loans back from defaulters.
7. The bank was asked to cooperate comprehensively with efforts to decide the case;
8. The Attorney-General Office, Ministries of Finance and Foreign Affairs, as well as the central bank, were tasked with contacting the countries where the money was stashed in 10 days for freezing and restituting the funds;
9: The Ministry of Finance was asked to process documents for the privatisation of New Kabul Bank for approval by the president.
10: The entities concerned will report their progress at the end of each week to the Presidential Palace. The Council of Ministers Secretariat will supervise implementation of the decree.
A fortnight ago, the Independent Joint Anti-Corruption and Evaluation Committee revealed the New Kabul Bank had lost around 47 million dollars during the past four years.
The defaulters include a gas distribution group, which has to return $121 million, Pamir Airlines to pay back over $100 million and the bank former head more than $80 million.
In its report, the committee requested the new government to support efforts for financial transparency and accountability of the culprits.