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Afghan Central Bank Governor Flees To US After Scam

Kabul, Jun 28 :  Afghanistan's central bank governor has reportedly resigned and fled to the United States, saying his life is in danger over a corruption probe targeting figures connected to the government. Abdul Qadir

PTI [ Updated: June 28, 2011 14:50 IST ]
afghan central bank governor flees to us after scam
afghan central bank governor flees to us after scam

Kabul, Jun 28 :  Afghanistan's central bank governor has reportedly resigned and fled to the United States, saying his life is in danger over a corruption probe targeting figures connected to the government.


Abdul Qadir Fitrat, chairman of Afghanistan Bank, made his announcement while on a visit to the United States, where he has permanent residency, according to several news reports.

He said he feared political interference and reprisals over his role in an investigation into the near-collapse last year of Kabul Bank, the war-torn country's largest private lender.

“My life was completely in danger and this was particularly true after I spoke to the parliament and exposed some people who are responsible for the crisis of Kabul Bank,” he was quoted as saying by the BBC.

A spokesman for Afghanistan's finance ministry, Aziz Shams, declined to comment in detail, saying the central bank was “an independent institution.” President Hamid Karzai's spokesman Waheed Omer was not immediately contactable.

In April, Fitrat named in parliament high-profile figures who were allegedly involved in a mammoth corruption scandal at Kabul Bank.

The bank was founded in 2004 by Sherkhan Farnood, a leading international poker player. Its co-owners included Mahmood Karzai, a brother of President Karzai, and a brother of Vice President Mohammad Qasim Fahim.

The lender was taken over last year by Afghanistan's central bank after claims that executives granted themselves off-the-book loans worth a reported $900 million that were partly used to buy luxury properties in Dubai.

The scandal has highlighted chaos and corruption in Afghanistan's financial system at a time when US-led combat troops are looking to exit the country, a decade after ousting the fundamentalist Taliban regime.

Some foreign troop withdrawals are due to start next month, with 10,000 United States forces scheduled to leave by the end of this year.

The International Monetary Fund wants the Karzai government to take steps to ensure a similar scandal does not happen again before it approves a new assistance program for the desperately-poor country.

The impasse has already seen hundreds of millions of dollars in international aid money to Afghanistan being withheld this year.

“We take note of Governor Fitrat's decision to step down as central bank governor,” IMF spokesman Raphael Anspach said, according to the Wall Street Journal.

“We look forward to continue discussing with his successor ways to improve the Afghan banking system in the period ahead.” Fitrat is reportedly holed up in a hotel in Washington's Virginia suburbs and refusing to return to Afghanistan.

“We do know that he is in Washington,” US State Department spokeswoman Victoria Nuland told reporters, declining to confirm that he had resigned.

“If there were to be a change of leadership at the Afghan central bank, we would continue to encourage that government to take all the necessary steps to reform and strengthen the financial sector,” she said.

The Kabul Bank crisis was triggered last September and led to fears that the lender could collapse.

A run on the bank was only halted after government assurances and injections of huge amounts of public money.

Some 80 per cent of government employees are thought to receive their wages through the bank.

Fitrat said in April that only around $47 million in cash of the $900 million had been recouped so far.

President Karzai has said rogue shareholders have been expelled from the bank and that they will face legal action if they do not repay their loans.

But Karzai has also lashed out at international institutions for allegedly failing to unearth Kabul Bank's problems, and his government has hinted that it could pull out of talks with the IMF despite the likely financial damage.

A week ago, Finance Minister Omar Zakhilwal said the government was “running out of patience” and accused the IMF of “playing games” over the crisis at Kabul Bank.

However, in announcing his resignation, Fitrat accused Afghan authorities of dragging their feet on the promised legal action.

According to the BBC, Fitrat said he had expected the probe would “help bring a closure” to the Kabul Bank scandal, but instead it had “brought more danger and it brought more conspiracy against me and against my life”.  AFP

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