July 1, 2011
Sometimes it is good to put things in perspective when comparing developed democracies like America and barbaric despotic dictatorships like Afghanistan. In one country, radioactively orange criminal heads of imploded mortgage lenders, who are responsible for billions in losses at rescued companies that will soon require more taxpayer bailouts, received multi million dollar golden parachute severance packages and slips on the write from the country’s “regulators.” In the other, former executives of a major failed bank have been arrested over huge fraud that led to its near collapse, while the head of its central bank flees to the first country on fears of prosecutions. Take a wild guess which country is which…
From the BBC:
Deputy Attorney General Rahmatullah Nazari said the bank’s founder and its former chairman Sherkhan Farnood and ex-CEO Khalilullah Ferozi were being held on embezzlement charges.
He told Reuters news agency both men would go on trial within a month.
Revelations of fraud, bad loans and mismanagement prompted a run on the bank last September.
It was bailed out by the central bank as part of efforts to prevent it from collapsing.
In April, it was split into a “good” and “bad” bank, and President Hamid Karzai vowed to take action against those responsible for the crisis.
Mr Farnood and Mr Ferozi, who both owned large stakes in the bank, were placed under house arrest at the time trouble hit, though they were reportedly able to move freely around Kabul nonetheless.
“We had to make arrests because Haji Khalil [Ferozi] and Sherkhan are the kind of people who can easily slip away from the country,” Mr Nazari said, Reuters reported.
“Both are responsible for millions of dollars of losses in Kabul Bank and they must appear in court before they go too far from our hands,” he said.
Another person who as we reported, and who is implicated in the massive fraud, is none other than the head of the former central bank head: Fitrat.
Earlier this week Afghan authorities issued a warrant for the arrest of the former governor of the Afghan central bank, Abdul Qadeer Fitrat, saying he was being investigated in connection with the fraud at Kabul Bank.
But he had already fled to the US, saying his life was in danger for exposing fraud.
In April, Mr Fitrat himself had accused several key Afghan officials – including President Hamid Karzai’s brother Mahmoud Karzai and Vice-President Qasim Fahim – of involvement. Both deny the charges.
Funny: he was being sought in connection with the fraud, while he told all his central banking cohorts that he was in danger due to exposing fraud.
Understandable. Must have been lost in translation.
This article was posted: Friday, July 1, 2011 at 3:34 am