Kabul Bank fraud claims probed

Customers waited outside the bank in September amid fears that it would collapse [EPA]

Afghanistan’s Kabul Bank is being investigated following allegations that its former chairman misused funds, the Afghan finance minister has told Reuters news agency.

“Mismanagement is being investigated,” Omar Zakhilwal said on Tuesday on the sidelines of an Afghanistan investment conference in Dubai.

Hundreds of Afghans queued outside the bank in September, trying to withdraw their savings after reports that millions of dollars had been lent and poured into high-risk real estate investments in Dubai.

Afghan authorities then seized operations at the bank, which is Afghanistan’s biggest privately owned, following allegations that Sherkhan Farnood, the chairman, misappropriated funds.

Farnood has been ordered to hand over more than $150m in luxury villas and condominiums  that he allegedly bought with the bank’s money for various Afghan elites, including Mahmood Karzai, the brother of the Afghan president.

Zakhilwal said the lender was now under the control of the central bank but was functioning normally.

“Kabul Bank has stabilised and is operating normally,” he said.