Afghanistan’s new president has re-opened an inquiry into the theft of almost $1bn from the Kabul Bank, which led to the collapse of the business, a national financial crisis and claims of high-level corruption.
Ashraf Ghani’s re-opening of the investigation on Wednesday fulfils a campaign promise to make fighting corruption a priority of his presidency.
Keep readinglist of 4 items
“As a first step, based on our promise to take action against administrative corruption, today the Kabul Bank case will be re-opened and an investigation will be launched,” Ghani said.
“We promised to combat corruption comprehensively, on a full scale and in a principled manner.”
Afghanistan’s corruption watchdog called the scandal “one of the largest banking failures in the world”, but few of those linked to the case were ever tried or returned the money.
The bank’s founder Sher Khan Fernod and the former chief executive, Haji Khalil Ferozi, were jailed for five years for taking $810m of the $935m.
Brothers of the former president, Hamid Karzai, and his then first vice-president, Mohammad Qasim Fahim, who were both shareholders, were spared jail following a presidential decree that granted immunity to those who returned funds.
The case was viewed as a crucial barometer of Afghanistan’s commitment to stabilising its economy. The government was forced to bail out the country’s then biggest bank.
It was later relaunched as the state-run New Kabul Bank.
While small sums were returned, most of the money was never repaid and confidence in the banking sector has yet to fully recover.
Haroun Mir, a political analyst based in Kabul, told Al Jazeera: “It’s like a bomb that has exploded, and certainly it will have a lot repercussion within Afghanistan’s political sphere.”
Grant McLeod, former adviser to the corruption watchdog and author of an upcoming report on the Kabul Bank, told Reuters: “It’s a smart move for the new government to announce further investigations because there is little else that would demonstrate their commitment to fighting corruption.
“That being said, there have been many promises and feigned proceedings in the past so it really comes down to how credibly the investigations are done.”
– additional reporting for Al Jazeera by Bethany Matta.