Afghanistan

Afghanistan is cracking down on tax evasion to repair its finances as the country’s economy struggles with renewed violence and the withdrawal of the huge coalition presence that fed business for years, The Wall Street Journal reported. The departure of most foreign troops two years ago allowed the Taliban to take advantage of the security vacuum and escalate attacks on the government, hurting consumer and business confidence. Double-digit economic growth rates collapsed to almost zero a year after the withdrawal.
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An Afghan special tribunal convicted and sentenced two former executives and 19 others for roles in the fraud that led to the collapse in 2010 of Afghanistan's largest private bank, but in a surprise decision threw out the most serious charges, The Wall Street Journal reported. Former Kabul Bank Chairman Sherkhan Farnood and former Chief Executive Khalilullah Ferozi were convicted of fraud at the bank and given five-year prison sentences, the court said Tuesday.
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Political interference has impeded an investigation into the collapse of Afghanistan's largest private lender, with some investors, including President Hamid Karzai's brother Mahmood, escaping scrutiny, a joint Afghan-international watchdog said in a report released Wednesday, The Wall Street Journal reported. The Afghan Attorney General's investigation into Kabul Bank's 2010 collapse has led to the prosecution of several bank executives, who have been on trial in the Afghan capital for about a month.
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The Afghan government will struggle to pay its bills "within a month" after the International Monetary Fund rejected proposals for resolving the Kabul Bank scandal, western officials have warned, The Guardian reported. Although the war-torn country's biggest bank nearly collapsed last September, the government of Hamid Karzai and the international community are still at loggerheads over plans to fund an $820m (£507m) bailout as well as how the disgraced former managers and shareholders who helped themselves to hundreds of millions of dollars should be prosecuted.
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Afghan officials plan to sell part of troubled Kabul Bank, the country's biggest financial institution, in hope of clearing the way to resume international aid temporarily suspended last year after the bank's loan scandal, The Los Angeles Times reported. The head of the country's central bank announced Wednesday that his institution had placed Kabul Bank in receivership and plans to have a government commission collect on its problem loans, then privatize what's left of the bank within three months.
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A damning internal report by Afghanistan’s own Central Bank depicts the Afghan political elite as using Kabul Bank, the country’s biggest financial institution, as its private piggy bank, the International Herald Tribune reported. The report both raises questions about why the authorities did not act sooner and suggests that the answers lay in the political connections of the bank’s officers and shareholders — the recipients of most of the more than $900 million in loans.
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Afghanistan’s government has agreed to wind down and sell off the embattled Kabul Bank to meet a condition imposed by the International Monetary Fund for resuming financial support to the country, an Afghan official said, the Financial Times reported. The IMF, backed by western donors, had demanded the government place the country’s biggest lender into receivership as part of a plan to shore up the financial system following the bank’s near-collapse last year.
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The International Monetary Fund has recommended that Afghanistan's largest and most troubled bank be placed in receivership and then sold off to recover from reckless lending that brought it to the brink of collapse last year, The Washington Post reported. After a visit to Kabul this month, the IMF recommended that the Afghan government implement several "immediate measures" to deal with Kabul Bank, including prosecuting fraud and placing it under receivership.
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The Afghan Central Bank on Monday sharply disputed accounts by The New York Times and several other publications that Afghanistan’s largest bank had hundreds of millions of dollars more in losses than previously publicized. In a statement and a news conference it said that Kabul Bank, the country’s largest, “had a bright future.” Kabul Bank, the country’s most politically connected as well as the largest, was crippled last fall when it became known that it had hundreds of millions of dollars in nonperforming loans.
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The run on deposits at the troubled Kabul Bank slowed Tuesday after a long religious holiday, but Afghan financial officials and businessmen said they foresaw further problems in stabilizing the bank, the nation’s largest, The New York Times reported. They raised the possibility of prosecutions of bank officials who were in charge until two weeks ago, when they were ousted because of fears that the bank’s losses far exceeded its deposits.
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