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Iraq seeks arrest of bank chief who has fled country

Reuters News
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Posted: Jun 05, 2011 8:28 AM
Iraq seeks arrest of bank chief who has fled country

By Aseel Kami and Waleed Ibrahim

BAGHDAD (Reuters) - Iraqi authorities have issued an arrest warrant for the head of one of the nation's biggest banks, which is under investigation for alleged irregularities, a government source and the bank's lawyer said on Sunday.

An Iraqi government source said Hussein al-Uzri, president and chairman of the state-owned Trade Bank of Iraq (TBI), had fled to Lebanon. He did not answer calls to his mobile phone.

Prime Minister Nuri al-Maliki ordered a judicial inquiry into TBI on Thursday, after a committee including officials from Iraq's anti-corruption commission and audit authority reported "violations" at the institution.

The move comes as Maliki faces growing discontent over rampant corruption and poor public services in oil-exporting Iraq, which prompted protests against his fragile coalition government earlier this year.

A British advisor to TBI's board told Reuters on Sunday that the investigation was politically-motivated and that the bank had been resisting government pressure to engage in "highly dubious and irregular" operations.

Sir Claude Hankes said the investigation could damage Iraq's ties with the international banking community. He said Uzri was "safe" outside Iraq but was "not in Lebanon."

Set up in 2003, after the U.S.-led invasion that toppled Saddam Hussein, TBI has developed a reputation as one of Iraq's most successful financial institutions.

It is involved in financing food supplies and securing private sector financing for power and other reconstruction projects.

A senior Iraqi government source said authorities had information that Uzri had gone to Beirut.

"The judiciary issued an arrest warrant against those people who could be detained on the basis of the evidence against them and one of them is the chairman of the bank," the source told Reuters.

Tareq al-Maamouri, TBI's legal adviser, also confirmed the arrest warrant against Uzri and said the bank chairman had been suspended from his duties.

TBI, which has 14 branches across Iraq, reported total assets of $15 billion for 2010, a 16 percent increase over 2009. It reported in May an 18 percent increase in 2010 profits to $361 million.

On Thursday, an Iraqi banking source said the violations at TBI related to billions of dinars in "irrecoverable bad debts" owed by Iraqi companies. Charges included poor administration and non-compliance with banking regulations, the source said.

Hankes had described the probe as "political skullduggery."

(Additional reporting and writing by Pascal Fletcher; Editing by Lin Noueihed)