IPFS News Link • Bank of International Settlements
Afghan bank officers' assets frozen
Afghanistan has frozen the assets of leading shareholders and
borrowers at Kabul Bank, the country's leading private bank, in the wake
of the crisis sparked by the resignation of two high-level directors.
Aimal
Hashoor, the central bank's spokesman, said on Tuesday the Central Bank
had ordered the assets of Sher Khan Farnood, Kabul Bank's former
chairman, and Khalilullah Fruzi, the chief executive officer, to be
frozen, together with those of several other shareholders and major
borrowers.
"This basically stops the sale of their assets until the situation becomes clear," Hashoor said.
Last
week, US media reported that the central bank had taken control of
Kabul Bank, forcing Farnood and Fruzi to resign and ordering the former
to hand over $160 million worth of luxury villas purchased with bank
funds in Dubai.
However, the Afghan government and the central
bank governor have both rejected the allegations, denying that the
central bank had stepped in and saying Farnood and Fruzi had stepped
aside in line with new financial regulations.
Hamid Karzai, the Afghan president, and Omar Zakhilwal, the country's finance minister, both said Farnood and Fruzi stepped down because of new banking rules forbidding shareholders from holding senior management positions at the bank.
Karzai connection
One of Karzai's brothers and the brother of one of his two
vice-presidents are major shareholders at Kabul Bank, whose customers
include about 250,000 state employees.
An official, speaking on
condition of anonymity, said Mahmoud Karzai, the president's brother,
was not subject to the central bank's asset freeze because he does not
have property registered in his name.
However, he said Mohammad Haseen, the brother of Mohammad Qasim Fahim, the first vice-president, was among them.
Corruption is one of the most common complaints from ordinary Afghans and Washington fears widespread corruption is boosting the Taliban-led armed campaign and complicating efforts to strengthen central government control so that US and other foreign troops can begin withdrawing.
Long queues of jittery customers have formed at the bank's branches since it became known last week that the two directors, who each own a 28 per cent stake in Kabul Bank, had quit.