AGO Warns of Legal Action Against Kabul Bank Defaulters

The Attorney General’s Office (AGO) warned on Tuesday it will take legal action against Kabul Bank debt defaulters who fail to repay their loans.

At a press conference in Kabul, AGO spokesman Basir Azizi said they had received the list of defaulters from the Kabul Bank’s clearance department – which collapsed in 2010 after over $900 million USD was stolen in a banking scandal.

Azizi warned that if the defaulters failed to repay their loans, government will seize and sell their properties.

But he said the clearance department was making progress in recovering some of the embezzled money.

About $228 million USD was recovered by the previous government, Azizi said, adding that a further $40 million USD worth of properties and loans had been recovered during the current tenure of the National Unity Government (NUG) – which took power in September last year.

“The clearance department is committed to recovering all loans,” Azizi noted. “We promise to not leave even a penny with a debtor.”

The AGO’s announcement comes a week after the director and deputy director of Kabul Bank’s clearance department were arrested on charges of receiving bribes from a defaulter.

Kabul Bank, once the country’s largest financial institution, was badly shaken in 2010, followed by its collapse, after the almost $1 billion USD scam was uncovered.

The former chairman of Kabul Bank, Sherkhan Farnood, and former CEO Khalilullah Ferozi, were both sentenced to 15 years in jail each in an Appeals Court verdict late last year. This move was among President Ashraf Ghani’s campaign promises, where he pledged to finalize the Kabul Bank case.

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