Amid pressure, Afghan president halts deal letting jailed man set up business
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Version 0 of 1. KABUL — After a huge public outcry, Afghan President Ashraf Ghani on Saturday abruptly reversed a controversial deal that allowed a jailed businessman, convicted of defrauding investors of the country’s largest bank, to set up a new business in order to repay his debt. Khalilullah Ferozi was supposed to serve a 15-year prison sentence for his role in a corruption scandal in which nearly $1 billion vanished from Kabul Bank. Ferozi was the bank’s chief executive, and the scheme nearly caused the bank’s collapse in 2010, sending shock waves through Afghanistan’s western donor base. [Elaborate ruse behind vast Kabul Bank fraud] But in a deal struck Wednesday, at an official function attended by several key government officials, Ferozi was allowed to leave his prison cell daily to build a mega housing project in Kabul. At the end of each workday, Ferozi was to return to his cell. The project, with an initial cost of $100 million, was to be bankrolled by a group of Afghan businessmen. Ferozi was to provide the land, which he owned. But the unprecedented deal by the government, which has made fighting corruption a top priority, drew stern criticism from lawmakers and the public at large. On Saturday, the government buckled under the pressure. In a statement, Ghani ordered the deal to be voided, saying that it “is not binding and fails to carry the legal weight of a contract.” The initial court verdict, in 2013, which convicted Ferozi and ordered him to repay a portion of the missing bank funds, was still binding, according to the statement. It added that only “the judicial branch of the country is authorized to amend the court’s verdict.” [Key players in Afghanistan’s largest banking scandal sentenced to prison] Ferozi could not be reached for comment. But speaking by phone Wednesday to The Washington Post, Ferozi said for a month now he has been free to work during the day and that he believed he would be able to cover his debt within two years from the project. The near-collapse of Kabul Bank in 2010 involved hundreds of millions of dollars in fraud and embezzlement by Ferozi and the bank’s then-chairman, Sherkhan Farnood, according to officials. Both were arrested and initially sentenced to five years in prison by the former government. The sentences caused outrage in a country where those convicted of smaller thefts or minor fraud receive much longer prison terms. After assuming power, the new government led by Ghani last year ordered the reopening of the bank’s scandal and doubling the prison term for both Farnood and Ferozi. Ghani has made fighting graft a top priority, hoping to reduce one of the main causes of Afghanistan’s growing instability and appease foreign donors. “I feel proud that civil voice in Afghanistan has become powerful enough to force government cancel bad deals with insiders & outsiders,” tweeted Amrullah Saleh, a former head of the country’s intelligence services, about Ghani’s decision. |