Auditors publish findings about Kabul Bank fraud

An independent anti-corruption committee has said the near-collapse of Afghanistan\'s Kabul Bank in 2010 was the result of weak regulatory oversight. But it also speaks of inappropriate political interference. Complex scheming by authorities and shareholders almost caused the collapse of Afghanistan\'s Kabul Bank, independent auditors maintained on Wednesday while presenting the findings collected during their work on the Anti-Corruption Monitoring and Evaluation Committee (MEC). Investigators included three Afghans and three foreigners whose work was funded by independent foreign institutions. \"The bank was effectively running a scheme where clients thought their money was being invested when in fact it was siphoned off illicitly,\" MEC Co-Chairman Drago Kos told reporters in explaining the $900-million (697-million-euro) losses the bank had incurred in the wake of massive fraud. Impunity in the way The report revealed that weak regulation and oversight saw the lender missing \"the early signs.\" But it also drew attention to massive political interference when it came to punishing those responsible for the fiasco. The sandal touched a brother of President Hamid Karzai and a brother of his vice-president, who were both shareholders in the bank, but were not charged with any wrongdoing. Twenty-two other suspects were put on trial. \"Information received during the inquiry indicates that the final decision about who to indict was made at the political level in the spring of 2011 by a high-ranking committee,\" the MEC said. \"Prosecutors were called in to amend the indictment to conform to the decisions taken.\" The report also hinted that Hamid Karzai himself benefited from the bank, saying that institutions had provided millions of dollars to the presidential campaign against central bank advice. The anti-corruption officials recommended that the impunity that existed in Afghanistan come to an end to allow all perpetrators and participants in the fraud to be prosecuted.