Kabulbank chiefs arrested as IMF demands audit

TWO FORMER executives of the beleaguered Kabulbank have been arrested on suspicion of misusing funds, and the IMF continues to insist on an audit to uncover further signs of poor management.

Former chairman Serkhan Farnood and former chief executive Khalilullah Ferozi each owned a 28% stake in the bank, which was pushed to the brink of collapse last year after corruption fears sparked a run, The Financial Times reports.

The IMF wants to see another audit of the bank and the prosecution of those responsible for insider lending before it will restore a credit line, and the organisation's blessing is important to secure other sources of aid.

Accountancy Age reported that the UK government's Department for International Development is funding the Kabulbank audit in a bid to restore flagging confidence.

Development secretary Andrew Mitchell said: "The audit will mean an improved, more stable banking system, which is vital for the Afghan economy." A spokeswoman revealed that the audit is likely to be carried out by an Afghan company due to language and local knowledge requirements.