‘Return Officials Wanted in Kabul Bank Fraud’

Published: 03rd November 2014 06:00 AM  |   Last Updated: 02nd November 2014 11:19 PM   |  A+A-

NEW DELHI: Afghanistan has asked India to return two Indians,  who were senior officials at the Kabul Bank which sank in a $935 million financial scam - an emblematic case of Afghan corruption - into which President Ashraf Ghani ordered a fresh probe on the second day in office.

Express has learnt that Afghan government had asked Indian authorities to return the two Indians, Kabul Bank’s head of credit department and head of the audit committee, G Ramachandran and R Gopalakrishnan. Both of them were arrested in 2010, but set free on an undertaking from the Indian Ambassador that they will return for trial. They never returned and were convicted in absentia in 2013, to a four years’ term.

In total, 21 accused were convicted, but not the main shareholders, brothers of President Hamid Karzai and then Vice-President Mohammad Qasim Fahim who got immunity for returning loaned money.

The request for the two Indians’ return reached the Indian Embassy about two weeks after Ghani ordered on October 2, the  reopening of investigation into Kabul Bank scam within 45 days.

According to sources, it is unlikely that India will accede to the request to return the two Indians.

“We have sounded out that it will be very difficult to send the two back. But, we can help in collecting evidence from them through other means, if so required,” a source told Express.

A former chief legal officer at the Ministry of External Affairs, Narinder Singh said that Indian government usually avoids giving guarantees about private individuals in foreign countries. 

“But, the special circumstances in Afghanistan then may have led to this exception,” he told Express.

He said that it would be challenging for India to send them back “as the Indian legal system does not recognise trial in foreign countries in absentia, as it is not part of the system here.”

Kabul Bank was the largest Afghan private bank, which used to distribute salaries to most Afghan civil servants.

In 2012, the Independent Joint anti-corruption Monitoring and Evaluation Committee (MEC) found that $935 million was siphoned out of the country, through a highly sophisticated network of fake companies and bad loans - most of it through just 19 organisations and individuals.

With losses equal to about 5% of Afghanistan’s GDP at that time, its reverberations continue to impact Afghan’s financial system even now.

A follow-up report of MEC published on October 2 this year termed the two Indian accused as “central to the execution of the Kabul Bank fraud”.

A US foreign affairs analyst Michael Huffman, who wrote an investigative report on Kabul Bank based on leaked insider information, has a different perspective.

Based on perusing of documents that he got from an anonymous Kabul Bank official, he said that there were other senior Indian officials - not named as accused - but key in constructing the technical structure for the embezzlement scheme.

They did not come to light as they left the bank before the scandal was revealed to the public. He believes that the two ‘convicted’ Indian nationals, who joined Kabul Bank much later, were not as complicit in the massive scam. This is not first time that Afghan government has invoked the guarantee for return of the two Indians, with previous letters sent in 2011 and 2012.

But, it is the significance of the probe to bolster Ghani’s anti-corruption platform which gives the request a different flavour.

Speaking to Express, Martine Van Bijlert, co-director of Afghanistan Analysts Network said that the announcement of the probe was “an important symbolic act for President Ghani to focus on Kabul Bank that early but in practice it is probably going to be quite difficult to prosecute people who have left the country”.


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