Two arrested in bank collapse

KABUL, Afghanistan, June 30 (UPI) -- Two former top executives of Afghanistan's central bank were arrested Thursday in a huge loan scandal at the facility, the deputy attorney general said.

Rahmatullah Nazari said the arrested were Sherkhan Farnood, former chairman, and Khalilulah Frozi, former chief executive officer of Kabul Bank, in the fraudulent loans of about $900 million from the bank to its bank officers and insiders, The New York Times reported.

The charges against the two were not disclosed but Nazari was quoted as saying they were being detained for additional investigation.

The bank has been hit by huge losses and the latest developments are the first arrests, the report said. Some of the international aid to Afghanistan has been stopped until the government of President Hamid Karzai resolves the issue.

Some of the loans were made to insiders with little or no collateral and other documentation.

The attorney general's office also has accused bank governor Abdul Qadeer Fitrat of taking huge bribes, the Times said.

Fitrat, who is now in the United States, has resigned his job, claiming he left Afghanistan due to threats against his life in retaliation for his investigation of corruption at the troubled bank.