Bank turns to history to sidestep cash probe

Published on Monday 6 September 2010 15:30

The governor of Afghanistan's central bank dodged questions about President Hamid Karzai's millionaire brother yesterday - despite his high-profile stake in the beleaguered Kabul Bank - by claiming it was rude to talk about Mahmood's money, because his ancestors fought for independence.

Thousands of investors continued to withdraw money from Kabulbank yesterday as the run on deposits entered a fifth day, fuelling fears of a meltdown.

The central bank forced Kabulbank's two largest shareholders to resign as chairman and chief executive last week amid allegations they had lent millions to themselves for a series of bad investments - including luxury property in Dubai. Mahmood Karzai, a former restaurateur, took a loan from the Kabulbank to buy a 7 per cent share.

Central bank governor Abdul Qadeer Fitrat, said the government had frozen some shareholders' assets, where there was evidence the shareholders had outstanding loans, but he denied claims they had issued a $200 million bail out.

Asked why he had not mentioned Mahmood Karzai, he said: "It would be very regrettable to talk about an Afghan whose grandfather was a hero during the war of independence. Can you ask that question of such a person?"