Open

Coming up

Don't miss

Replay


LATEST SHOWS

THE WORLD THIS WEEK

The World this Week - September 19th, 2014

Read more

THE WORLD THIS WEEK

The World this Week - September 19th, 2014 (part 2)

Read more

IN THE PAPERS

Coalition split on 'English votes for English laws'

Read more

IN THE PAPERS

French papers react to Sarkozy's TV return

Read more

WEB NEWS

Brazil's presidential election seen from the web

Read more

WEB NEWS

Ivory Coast launches the "Soap Bucket Challenge"

Read more

#TECH 24

Anonymous Vs ISIS

Read more

AFRICA NEWS

Ebola virus: US to send 3,000 troops to West Africa

Read more

AFRICA NEWS

Nigeria attack: Bomb blast in college in Kano

Read more

Asia-pacific

Central bank freezes former Kabul Bank executives' assets

Text by News Wires

Latest update : 2010-09-07

Afghanistan's central bank has ordered a freeze on assets belonging to several of Kabul Bank's leading shareholders and borrowers, including two embattled former directors who quit last week over allegations of corruption.

REUTERS - Afghanistan has frozen the assets of leading shareholders and borrowers at Kabulbank, the country’s top private lender, after the resignation of two top directors triggered a crisis, officials said on Tuesday.

The central bank on Monday ordered the assets of Kabulbank’s former chairman Sher Khan Farnood and chief executive officer Khalilullah Fruzi to be frozen, together with those of several other shareholders and major borrowers.

“This basically stops the sale of their assets until the situation becomes clear,” said Aimal Hashoor, the central bank’s spokesman.

Last week, U.S. media reported the central bank had taken control of Kabulbank, forcing Farnood and Fruzi to resign and ordering the chairman to hand over $160 million worth of luxury villas purchased with bank funds in Dubai.

However, the Afghan government and the central bank governor have both rejected the allegations, denying that the central bank had stepped in and saying Farnood and Fruzi had stepped aside in line with new financial regulations.

Corruption is one of the most common complaints from ordinary Afghans and Washington fears widespread graft is boosting the Taliban-led insurgency and complicating efforts to strengthen central government control so U.S. and other foreign troops can begin withdrawing.



Long queues of jittery customers have formed at the bank’s branches since it became known last week that the two directors, who each own a 28 percent stake in Kabulbank, had quit.

President Hamid Karzai and Finance Minister Omar Zakhilwal, seeking to avert a run on the bank, both said the pair stepped down because of new banking rules forbidding shareholders from holding senior management positions at the bank.

One of Karzai’s brothers and the brother of one of his two vice presidents are also major shareholders at Kabulbank, whose customers include about 250,000 state employees.

An official, speaking on condition of anonymity, said Mahmoud Karzai, the president’s brother, was not subject to the central bank’s asset freeze because he does not have property registered in his name. However, he said Mohammad Haseen, the brother of First Vice President Mohammad Qasim Fahim, was among them.

Last week, U.S. officials said the Treasury Department had sent a team to Kabul and that it supported the Afghan Central Bank’s action in response to reports of fraud at Kabulbank. But the official said the United States was not taking any steps to recapitalise Kabulbank.

 

Date created : 2010-09-07

  • AFGHANISTAN

    Kabul Bank: Where business and political ties bind

    Read more

  • AFGHANISTAN

    Karzai scraps guns for hire, but where do the gunslingers go?

    Read more

  • AFGHANISTAN

    Karzai calls for disbanding of private security firms within four months

    Read more

COMMENT(S)