News / Asia

    Lack of Oversight Blamed for Kabul Bank Crisis

    A security guard stands outside the main office of Kabul Bank, September 1, 2010.
    A security guard stands outside the main office of Kabul Bank, September 1, 2010.
    VOA News
    An independent panel probing Afghanistan's failed Kabul Bank says a few individuals acted with "reckless disregard" in defrauding the bank, while a lack of oversight and enforcement contributed to the loss of hundreds of millions of dollars.

    A new report issued Wednesday says $861 million in illicit loans were made to 19 individuals and businesses, including $270 million to the bank's former chairman.  

    The committee says senior bank officials told employees to make loans based on fabricated records, and used two sets of accounting books to carry out a "sophisticated operation of fraudulent lending and embezzlement."

    The 87-page report says the scheme utilized new loans to give the impression that money was being repaid, but that true repayments of principal or interest were "extremely rare."

    The committee was created in 2010 to monitor and evaluate anti-corruption efforts, and includes three Afghans and three international appointees.

    It says Afghan citizens will bear the cost of the bank's failure with money that could have been used for education, healthcare, infrastructure or security.

    Major bank failure

    Kabul Bank was once Afghanistan's largest private lender and nearly collapsed in 2010.  Afghanistan's central bank stepped in and took control of the bank, which was later split into two.

    Wednesday's report calls Kabul Bank one of the biggest banking failures in the world, and says it will undermine not only public trust in financial and government institutions, but also efforts to rebuild Afghanistan.

    The report says bank management gave out $66 million in bank funds used to benefit businesses they controlled.  The money bought properties, hundreds of cars and paid salaries to Pamir Airways employees described as "pilots for cash delivery."

    Almost $6 million went to travel expenses that were explained with few details and often no supporting documents.

    As of August, $128 million in cash and another $190 million in assets had been recovered.

    21 indicted

    Afghanistan's attorney general has indicted 21 people and named several others as persons of interest in connection with criminal activity at Kabul Bank.  The report says five people are in custody, but that many of those indicted and considered persons of interest have fled the country.

    The Afghan government has called for the United States to extradite the former head of the Afghan central bank, Abdul Qadir Fitrat, who fled to the U.S. last year.  Fitrat said he feared for his life after trying to prosecute those who stole from Kabul Bank.  Afghan officials say Fitrat played a role in the scandal and want him brought back to Afghanistan to face charges.

    The new report criticizes outside political influence on the attorney general's independent ability to determine what charges should be brought.  It cites a committee set up by President Hamid Karzai in 2011 to report on the crisis, which immediately announced the Afghan leader would himself decide whom to prosecute.

    Karzai also issued a decree absolving those who paid back the principal of outstanding loans from having to pay interest or face criminal charges.

    The panel said there is "great concern" about delays and the manner of the attorney general's own investigation.  The report says "reasonable grounds" for an investigation existed as early as September 2010, but that a formal investigation did not begin until April 2011.

    Political ramifications

    The panel says some of the bank's money went toward financing the campaigns of at least one presidential candidate and between 30 and 40 parliamentarians.  It recommended Afghanistan adopt political financing regulations that include open reports of who makes political contributions.

    The panel also says the attorney general's office should document its investigations in writing, including "clear rationale" for why it decided to issue or not issue any charges.

    The report also calls on a special tribunal set up by Karzai to hear the case to focus its efforts on processing the charges of those already indicted, instead of other activities including those related to recovering funds.

    The panel, officially known as the Independent Joint Anti-Corruption Monitoring and Evaluation Committee, asked the Afghan government, the country's central bank and other affected institutions to respond in 60 days with their intentions to implement the committee's recommendations.

    You May Like

    Vietnam Mulls Tough Measures for ‘Misbehaving’ Chinese Tourists

    Move comes after footage surfaced online of Chinese travelers harassing a banana hawker in Da Nang

    Pakistan Social Media Star's Honor Killing Fuels Debate

    Qandeel Baloch's murder puts spotlight on deadly tradition and other mistreatment of women

    This forum has been closed.
    Comments
         
    There are no comments in this forum. Be first and add one

    Featured Videos

    Your JavaScript is turned off or you have an old version of Adobe's Flash Player. Get the latest Flash player.
    Wall Already Runs Along Parts of US-Mexico Borderi
    X
    July 22, 2016 12:30 AM
    The Republican Party’s presidential nominee, Donald Trump, gained the support of many voters by saying he would build a wall to keep undocumented immigrants and drugs from coming across the border from Mexico. Critics have called his idea impractical and offensive to Mexico, while supporters say such a bold approach is needed to control the border. VOA’s Greg Flakus has more from the border town of Nogales, Arizona.
    Video

    Video Wall Already Runs Along Parts of US-Mexico Border

    The Republican Party’s presidential nominee, Donald Trump, gained the support of many voters by saying he would build a wall to keep undocumented immigrants and drugs from coming across the border from Mexico. Critics have called his idea impractical and offensive to Mexico, while supporters say such a bold approach is needed to control the border. VOA’s Greg Flakus has more from the border town of Nogales, Arizona.
    Video

    Video New HIV Tests Emphasize Rapid Results

    As the global fight against AIDS intensifies, activists have placed increasing importance on getting people to know their HIV status. Some companies are developing new HIV testing methods designed to be quick, easy and accurate. Thuso Khumalo looks at the latest methods, presented at the International AIDS conference in Durban, South Africa.
    Video

    Video African Youth with HIV Urge More Support

    HIV, the virus that causes AIDS, is the top killer of teens in sub-Saharan Africa. But many youths say their experience with the virus is unique and needs to be addressed differently than the adult epidemic. VOA South African Correspondent Anita Powell reports.
    Video

    Video Poor Residents in Cleveland Not Feeling High Hopes of Republican Convention

    With the Republican Party's National Convention underway in Cleveland, Ohio, delegates and visitors are gathered in the host city's downtown - waiting to hear from the party's presidential candidate, Donald Trump. But a few kilometers from the convention's venue, Cleveland's poorest residents are not convinced Trump or his policies will make a difference in their lives. VOA's Ramon Taylor spoke with some of these residents as well as some of the Republican delegates and filed this report.
    Video

    Video Pop-Up Art Comes to Your Living Room, Backyard and Elsewhere

    Around the world, independent artists and musicians wrestle with a common problem: where to exhibit or perform? Traditional spaces such as museums and galleries are reserved for bigger names, and renting a space is not feasible for many. Enter ArtsUp, which connects artists with venue owners. Whether it’s a living room, restaurant, office or even a boat, pop-up events are bringing music and art to unexpected places. Tina Trinh has more.
    Video

    Video With Yosemite as Backdrop, Obama Praises National Parks

    Last month, President Barack Obama and his family visited some of the most beautiful national parks in the U.S. Using the majestic backdrop of a towering waterfall in California's Yosemite National Park, Obama praised the national park system which celebrates its 100th anniversary this year. He talked about the importance of America’s “national treasures” and the need to protect them from climate change and other threats. VOA’s Julie Taboh reports.
    Video

    Video Counter-Islamic State Coalition Plots Next Steps

    As momentum shifts against Islamic State in Iraq, discussions are taking place about the next steps for driving the terrorist group from its final strongholds. Secretary of State John Kerry is hosting a counter-IS meeting at the State Department, a day after defense ministers from more than 30 countries reviewed and agreed upon a course of action. VOA Pentagon correspondent Carla Babb reports.
    Video

    Video Russia's Participation at Brazil Olympic Games Still In Question

    The International Olympic Committee has delayed a decision on whether to ban all Russian teams from competing in next month's Olympic Games in Brazil over allegations of an elaborate doping scheme. The World Anti-Doping Agency recently released an independent report alleging widespread doping by Russian athletes at the 2014 Winter Olympics in Sochi. So far, only Russian track and field athletes have been barred from the Summer Games in Brazil. VOA's Zlatica Hoke has more.
    Video

    Video Scotland’s Booming Whisky Industry Fears Brexit Hangover

    After Britain’s vote to leave the European Union, Scotland’s government wants to break away from the United Kingdom – fearing the nation’s exports are at risk. Among the biggest of these is whisky. Henry Ridgwell reports on a time of turmoil for those involved in the ancient art of distilling Scotland’s most famous product.
    Video

    Video Millennials Could Determine Who Wins Race to White House

    With only four months to go until Americans elect a new president, one group of voters is getting a lot more attention these days: those ages 18 to 35, a generation known as millennials. It’s a demographic that some analysts say could have the power to decide the 2016 election. But a lot depends on whether they actually turn out to vote. VOA’s Alexa Lamanna reports.
    Video

    Video Number of Syrian Refugees Arriving in US Jumps

    The United States is committed to resettling 85,000 refugees from around the world by October. Of that number, 10,000 will come from Syria and already some 4,000 Syrian refugees have arrived in the United States, many of them settling in the state of Illinois. As VOA’s Kane Farabaugh reports from Chicago, their arrival is not the end of a difficult journey to find peace and stability.
    Video

    Video Rio’s Trams Await Olympic Tourists

    Over the past century, many cities around the world replaced electric trams, prone to breakdowns and backups, with faster and more spacious buses. But for some reason restored antique trams are a huge tourist attraction. So it’s no wonder the authorities in Rio de Janeiro are busy restoring their city’s old tram line ahead of the Summer Olympic Games. VOA’ George Putic reports.

    Special Report

    Adrift The Invisible African Diaspora