Former Afghan Bank Chief Faces Charges

Posted June 28th, 2011 at 2:20 pm (UTC-5)
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Afghanistan's deputy attorney general says the former head of the country's central bank, who resigned and fled the country, faces charges and will be prosecuted.

Central Bank Governor Abdul Qadir Fitrat left Afghanistan for the United States and stepped down from his post Monday, saying he feared for his life after investigating the corruption scandal involving Kabul Bank.

But Deputy Attorney General Rahmatullah Nazari told reporters in Kabul Tuesday that an arrest warrant for Fitrat has been sent to Interpol and the U.S. embassy in Kabul to return Fitrat to Afghanistan for questioning.

Nazari says Fitrat failed to act when warned by Afghan officials of widespread irregularities at Kabul Bank, and that he had a role in the crisis.

Kabul Bank, Afghanistan's largest private lender, lost more than $900 million in funds and nearly collapsed last year due to alleged mismanagement, cronyism and questionable lending.

Afghan President Hamid Karzai's brother and Vice President Mohammad Qasim Fahim's brother are both shareholders in Kabul Bank.

Fitrat told reporters outside Washington on Monday he felt that he was at risk after he exposed some people responsible for the crisis to parliament in April.

In his resignation letter, Fitrat implies that high-level government officials had interfered with the probe into Kabul Bank. He said in April that authorities have recouped only $47 million in loan money and that the government was trying to get bank executives, shareholders and others who received illicit loans to repay the money.

President Karzai's spokesman, Waheed Omar, called Fitrat a “runaway governor” Monday and disputed claims that he left the country because his life was in danger.

Omar said the former central bank chief did not go through official channels to resign, but instead escaped the country.

Kabul Bank handles the salaries of Afghan soldiers, police and teachers.

The financial fiasco has caused some international donors to question the stability of Afghanistan's financial system, just as the country is trying to take on more responsibility for security and development.

The International Monetary Fund has decided not to renew its support program until the Afghan government takes concrete steps to resolve the Kabul Bank crisis. Tens of millions of dollars in aid from foreign donor nations has been subsequently withheld from Afghanistan.