Afghan banks promise to recover $900m fraud losses

Donor nation and IMF loans were temporarily cancelled following the case Kabul – Arabstoday The Afghan government has urged Western nations to help recover millions of dollars smuggled abroad in what it called the \"largest and most complex financial crime in the history\" of the country. A court in Kabul on Tuesday jailed 20 people, including two senior executives, for their roles in the $900m fraud that caused the collapse of Kabul Bank in 2010, AFP has reported.
Cash stolen from the bank through fake loans was used to buy property in Britain, Dubai, Switzerland and the United States, and the Finance Ministry in Kabul said it was determined to recover the losses.
\"With these verdicts we now expect our international partners to assist us in the confiscation and return of the stolen assets that are deposited or invested in different Western countries,\" it said in a statement.
The bank\'s former chairman, Sher Khan Farnoud, and its former CEO Khalilullah Ferozi, were given five-year jail terms. Eighteen other officials were also convicted.
Authors of an independent inquiry into the fraud complained that the sentences were too light and that some of those convicted had little or no involvement in the crime.
A brother of President Hamid Karzai and a brother of Vice President Marshal Mohammad Qasim Fahim were shareholders in the bank and are alleged to be linked to the scandal. They were not charged.
But the Finance Ministry lauded the court\'s ruling as a sign that corruption was being tackled.
\"These verdicts show that Afghan legal institutions have the capacity and will to prosecute and adjudicate the most challenging criminal cases,\" it said.
\"Many observers doubted that these prosecutions would ever go forward, much less come to a successful conclusion.\"
It said the collapse of Kabul Bank, the largest in the country, had \"cast doubt upon the sustainability of our growth and future prosperity\" but the convictions showed Afghanistan was facing up to its economic challenges.
The scale of the fraud, in which some cash was smuggled abroad in airline food trays, shocked Afghanistan\'s donor nations and the International Monetary Fund temporarily halted loans to the country.
Billions of dollars in aid have been pledged to help Afghanistan after NATO combat troops withdraw in 2014, but on condition that high-level government corruption is brought under control.