Influential Afghan banker fuels crony capitalism
Afghanistan’s biggest private bank — founded by the Islamic nation’s only world-class poker player — celebrated its fifth year in business last summer with a lottery for depositors at Paris Palace, a Kabul wedding hall.world Updated: Feb 23, 2010 01:09 IST
Afghanistan’s biggest private bank — founded by the Islamic nation’s only world-class poker player — celebrated its fifth year in business last summer with a lottery for depositors at Paris Palace, a Kabul wedding hall.
Prizes awarded by Kabul Bank included nine apartments in the Afghan capital and cash gifts totalling more than $1 million. The bank trumpeted the event as the biggest prize drawing of its kind in Central Asia.
Less publicly, Kabul Bank’s boss has been handing out far bigger prizes to his country’s US-backed ruling elite: multimillion-dollar loans for the purchase of luxury villas in Dubai by members of Hamid Karzai’s family, his government and his supporters.
The close ties between Kabul Bank and Karzai’s circle reflect a defining feature of the shaky post-Taliban order in which Washington has invested more than $40 billion and the lives of more than 900 US service members: A crony capitalism that enriches politically connected insiders and dismays the Afghan populace.
“What I’m doing is not proper, not exactly what I should do. But this is Afghanistan,” Kabul Bank’s founder and chairman, Sherkhan Farnood, said in an interview when asked about the Dubai purchases and why, according to data from the Persian Gulf emirate’s Land Department, many of the villas have been registered in his name. “These people don’t want to reveal their names.”
Afghan laws prohibit hidden overseas lending and require strict accounting of all transactions. But those involved in the Dubai loans said the cozy flow of cash is not unusual or illegal in a deeply traditional system underpinned more by relationships than laws.
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