Governor of Afghan central bank flees to US

AFP/Kabul

I announce my resignation from the position of governor of the central bank of Afghanistan immediately

Afghanistan’s central bank governor has resigned and fled to the United States, saying his life is in danger over a corruption probe targeting influential figures connected to the government. President Hamid Karzai’s government yesterday dismissed the claims made by Abdul Qadir Fitrat, chairman of Da Afghanistan Bank, insisting his life was not under threat and calling him a “runaway governor”. “I announce my resignation from the position of governor of the central bank of Afghanistan immediately,” Fitrat said in a statement issued as he visited the United States, where he reportedly has permanent residency. “Unfortunately, central bank’s independence on regulatory and supervisory matters has recently been undermined by the repeated interference of high-level political authorities,” he said. The governor has claimed his role in an investigation into the near-collapse last year of Kabul Bank, the war-torn country’s largest private lender, had put him in peril. “My life was completely in danger and this was particularly true after I spoke to the parliament and exposed some people who are responsible for the crisis of Kabul Bank,” he was quoted as saying by the BBC. In April, Fitrat named in parliament high-profile figures who were allegedly involved in a corruption scandal amounting to nearly $1bn at Kabul Bank, which handles the pay of thousands of Afghan civil servants. The bank was founded in 2004 by Sherkhan Farnood, a leading international poker player. Its co-owners included Mahmood Karzai, a brother of President Hamid Karzai, and a brother of Vice-President Mohamed Qasim Fahim. The scandal has highlighted chaos and corruption in Afghanistan’s financial system at a time when US-led combat troops are due to start leaving the country, a decade after ousting the Taliban regime. Some foreign troop withdrawals are due to start next month, with 10,000 United States forces scheduled to leave by the end of this year. President Karzai’s spokesman Waheed Omer angrily dismissed Fitrat’s claims. “We don’t think that’s very valid. He never actually told anyone in the government that his life was in danger,” Omer said. “This is basically an escape, not a resignation... the formal procedures have not been adhered to. He’s not a governor but a runaway governor.” Another presidential spokesman, Siamak Herawi, said Fitrat’s move was linked to possible legal action against him over the Kabul Bank case after investigators lodged files with the attorney-general. “After he learnt about his case being sent to the attorney-general, we think that might have been the reason for his escape,” he said. Last year’s near-collapse of the bank led to long queues of nervous investors outside banks across Kabul and news of Fitrat’s resignation prompted anxiety about the state of the financial system among some Kabulis. “The fact that the chief of the central bank has been threatened and been forced to quit shows that corrupt strongmen are still in control, they will not allow reforms in the banking system,” said Fazull Rahman, a teacher and foreign currency exchanger, speaking outside a branch of Kabul Bank in the city.  “I am disappointed and worried.”The lender was taken over by Afghanistan’s central bank after claims that executives granted themselves off-the-book loans worth a reported $900 million that were partly used to buy luxury properties in Dubai. The International Monetary Fund wants the Karzai government to take steps to ensure a similar scandal does not happen again before it approves a new assistance programme for the desperately poor country. With tensions high between Kabul and the IMF, the impasse has already seen hundreds of millions of dollars in international aid money to Afghanistan being withheld this year. “We take note of Governor Fitrat’s decision to step down as central bank governor,” IMF spokesman Raphael Anspach said, according to the Wall Street Journal. “We look forward to continue discussing with his successor ways to improve the Afghan banking system in the period ahead.” Fitrat is reportedly holed up in a hotel in Washington’s Virginia suburbs and refusing to return to Afghanistan. US State Department spokeswoman Victoria Nuland confirmed Fitrat was in Washington.