Afghan government says cenbank governor on prosecution list

Reuters News
Posted: Jun 27, 2011 1:29 PM
Afghan government says cenbank governor on prosecution list

By Hamid Shalizi

KABUL (Reuters) - The Afghan government said on Monday it was not aware that central bank governor Abdul Qadir Fitrat had resigned but said he was partly responsible for a fraud scandal that led to the collapse of Kabulbank, the country's biggest private lender.

Waheed Omer, the chief spokesman for Afghan President Hamid Karzai, told Reuters in Kabul that Fitrat's name was on a list of people the attorney general's office planned to prosecute over the scandal.

"This is not a resignation, this is treason to the Afghan people and a very irresponsible act," Omer said.

Fitrat told Reuters in an interview in Virginia that he had quit in fear of his life for his role in investigating the scandal, in which hundreds of unsecured loans were handed out to a roster of Afghanistan's political elite.

The IMF says about $900 million is at risk. Western officials in Kabul openly call the Kabulbank scandal a classic Ponzi scheme.

Bad loans, corruption and mismanagement forced the central bank to step in last year, eventually bailing the politically well-connected bank out with $820 million of its own reserves.

Fitrat said he could not resign in Afghanistan because his life "was completely in danger."

However Omer said Fitrat, central bank governor since 2007, was partly responsible for the scandal, which has added a financial crisis to Afghanistan's long list of security and political woes.

"Part of the Kabulbank crisis was his responsibility because of his negligence and irresponsible performance," Omer said. "It's not suitable for an Afghan official to run away and make excuses such as this."

(Additional reporting by Doug Palmer in Chantilly, Virginia; Writing by Paul Tait; Editing by Michael Roddy)