Appeals court increases prison terms for two top Kabul Bank officials

An appeals court on Tuesday increased the prison terms for two former top officials of Kabul Bank, whose collapse in 2010 nearly destroyed Afghanistan’s banking sector.

The former bank chairman, Sherkhan Farnood, and former chief executive, Khalilullah Ferozi, were sentenced to 15 years each for embezzlement and money laundering. The court also fined them hundreds of millions of dollars.

The resentencing, which was broadcast live on television after a two-day appeal of their orginal sentences of five years, is part of an anticorruption drive by the country’s new president, Ashraf Ghani.

Last month, in his first week in office, Ghani set out to reclaim more than $900 million looted by politically connected Afghans from the country’s biggest private bank. Only about a third has been recovered so far.

The appeals court also ordered the assets of Mahmoud Karzai and Haseen Fahim, brothers of the former President Hamid Karzai and former first Vice President Mohammed Qasim Fahim, and other defendants frozen until their debts are repaid.

But some are skeptical of the handling of the case. Saeeq Shajjan, a Kabul-based lawyer, said such a large fraud case required more than two days to investigate.

The defendants can appeal their sentences, and Shajjan told the Los Angeles Times that he is convinced they will push for the case to reach the Supreme Court.

“Throughout the proceedings, Farnood and Ferozi both maintained their innocence,” he said. “By law, the maximum sentence they can receive is 20 years. They don’t have much to lose in going to the highest court.”

The disappearance of $935 million from Kabul Bank sparked one of the largest bank failures ever.

The theft -- which financed shopping sprees and overseas villas for leading shareholders while leaving ordinary account holders broke -- amounted to 6% of Afghanistan’s gross domestic product. It dealt a huge blow to international confidence in the country’s fledgling public institutions.

Latifi is a special correspondent.