Report: Kabul Bank of Afghanistan lost $900 million to fake loans, theft
Kabul, Afghanistan (4E) – The Kabul Bank of Afghanistan lost close to $900 million from fraudulent borrowings and theft, according to an independent report released to the media on Wednesday.
The report of the Independent Joint Anti-Corruption Monitoring and Evaluation Committee also said that some fraud suspects identified with the elite of Afghanistan were removed from the list of people supposed to be indicted for causing the bank’s collapse in 2010.
Excluded from the final list were officials from accounting firms that created false documents for Kabul Bank, airline employees that smuggled the bank’s money out of Afghanistan, or shareholders who received funds from loans at zero interest, apparently without the intention of repayment, according to the report.
The U.S. audit firm Kroll found that 92 percent of the bank’s loan portfolio or $861 million were channelled to 19 fake companies while only $72 million were legitimate borrowings. Among the alleged fake borrowers were Karzai’s brother Mahmood Karzai and a brother of the country’s First Vice President Muhammad Qasim Fahim. Mahmood Karzai, however, claimed that he repaid the $4.2 million he borrowed from the bank with interest.
Kabul Bank was established in 2004 and had one million Afghans as depositors before reports of corruption led to a bank run in 2010. The Afghanistan central bank took over the bank in 2010 and put it under receivership in 2011.