Former Afghan minister arrested on corruption charges

March 29 (Reuters) – A former cabinet minister has been
arrested on corruption charges and a senior adviser to the
president, who is also a former central bank chairman, has been
questioned amid a growing banking scandal, the attorney
general’s office said on Tuesday.

Enayatullah Qasimi, the former minister for aviation and
transport, was arrested on two charges of alleged corruption
involving up to $9 million, a spokesman for the attorney
general’s office said on Tuesday.

Noorullah Delawari, who advises President Hamid Karzai on
Afghanistan’s banking and private sectors, was also questioned
but later released, spokesman Amanullah Eman told reporters.

There was no immediate response to the charges from Qasimi,
or any comment from Delawari.

On Monday, under threat of the loss of support from the
International Monetary Fund (IMF) and billions of dollars in
aid, the Afghan government agreed to break up the country’s
biggest lender, Kabulbank, which is mired in a fraud scandal
involving hundreds of millions of dollars. [ID:nL3E7ES17C]

Karzai’s government and the IMF have been at loggerheads
since September, when the scandal emerged at the politically
well-connected Kabulbank that has put at risk at least $579
million dollars through fraud, bad loans and mismanagement.

The central bank had initially resisted the IMF’s
recommendations that Kabulbank be placed into immediate
receivership, arguing that the bank could be rehabilitated and
sold later as a going concern.

But on Monday, diplomats in Kabul told Reuters the Afghan
government had agreed to put Kabulbank into receivership after a
withering assessment by the IMF of its handling of the crisis.

Diplomats also said a special tribunal, set up by Karzai to
try cases stemming from last year’s troubled parliamentary
election, would be used to hear fraud cases stemming from the
Kabulbank crisis.

On Tuesday, the New York Times newspaper said a report
written this month by the central bank depicted Afghanistan’s
political elite using Kabulbank as “its private piggy bank”.

Among three senior shareholders and former Kabulbank
executives under investigation is Mohammad Haseen, the brother
of Afghanistan’s First Vice President Mohammad Qasim Fahim.

Another major shareholder is Mahmoud Karzai, the brother of
president Karzai, although he is not under investigation in
Afghanistan. Existing shareholders will have their rights
extinguished under the receivership deal, diplomats said.

Delawari, who had also served as a former senior adviser to
the finance minister, still sits on the central bank’s supreme
council, the bank’s decision-making body.

He is also the president and chief executive officer of the
independent Afghanistan Investment Support Agency (AISA).

Prior to 2002, he worked as a commercial banker in the
United States, including 16 years as the vice president of
Multinational Division, Lloyds Bank, California, according to
AISA’s website.

Karzai’s government has long been plagued by accusations of
endemic corruption which have strained ties with his Western
backers. The Kabulbank crisis added a banking scandal to
Afghanistan’s list of troubles, which also include a growing
Taliban-led insurgency and political paralysis. [ID:nSGE71D)6A]

(Reporting by Hamid Shalizi; Writing by Jonathon Burch; Editing
by Paul Tait and Sugita Katyal)

Former Afghan minister arrested on corruption charges