Afghan Government Moves Toward Seizing Assets of Troubled Bank’s Shareholders

KABUL, Afghanistan — The Afghan government took steps on Sunday toward seizing the properties of major shareholders of the troubled Kabul Bank, as perturbed crowds and national security forces surrounded the central branch of the bank, the country’s largest.

It was unclear how much money nervous depositors withdrew Sunday as fears of bankruptcy spread for the fourth consecutive day.

Kabul Bank’s chief operating officer, senior officials of the Afghan Central Bank and the Minister of Finance would not discuss details of efforts to shore up the bank. On Saturday, American officials said that the Central Bank had transferred $300 million from its reserves in the United States, but it was unclear how much, if any, of that money would be used to rescue Kabul Bank.

A prominent Afghan member of Parliament said Sunday that President Hamid Karzai had ordered the Central Bank to set aside $380 million to be eventually pumped into the Kabul Bank. The lawmaker, who would speak only on the condition of anonymity, said he was told of the order “by the closest people to the president.”

Barbed wire was placed around the bank on Sunday, and it was encircled by armed trucks and national security forces from the Afghan intelligence agency who had replaced guards belonging to a private security company owned by the brother of the bank’s former chief executive officer.

The Central Bank sent an official letter on Sunday to the city of Kabul demanding that it monitor properties in the capital owned by major Kabul Bank shareholders, including Sherkhan Farnood, the former chairman, and Khalilullah Frozi, the former chief executive, both of whom were dismissed last week as news of the bank’s losses broke.

The Central Bank’s monitoring request was an effort to prevent the shareholders from selling their assets, said the director of the city’s properties department, Muhammad Naeim Khan.

A Central Bank official, speaking on the condition of anonymity because he was not authorized to talk to reporters, said, “We are now working on confiscating their properties.”

The letter instructs the municipality to “prevent selling the properties” of five major shareholders of Kabul Bank. However, the letter does not mention the name of Mahmood Karzai, the brother of the president who is the third largest shareholder of Kabul Bank. The letter was first made public by TOLO TV, an Afghan channel.

Mr. Karzai said he does not own property in Kabul, however, it is common for the elite to title their holdings under the names of friends and family. Mr. Karzai said he opposes any form of bailout. He said Kabul Bank remains solvent. The panic began last week when the Central Bank ousted Mr. Farnood and Mr. Frozi after discovering that the bank had lent hundreds of millions of dollars to allies of Mr. Karzai and poured money into risky real estate investments in Dubai.

The crisis is threatening to undermine confidence in Afghanistan’s fledgling financial system, which was built under American guidance after the collapse of the Taliban government in 2001.

Among the bank’s clients is the government, which uses it to pay the salaries of about 250,000 public employees, including security officials and the military. Last week the government transferred $100 million to the bank to ensure it could pay those salaries.

The bank, whose major shareholders include a brother of Mr. Karzai and a brother of the first vice president, helped finance the president’s election campaign last year and lent luxury apartments in Dubai rent-free to well-placed officials. Those connections helped shield the bank from scrutiny, officials said.

Abdullah Abdullah, who as the chairman of the leading opposition party is President Karzai’s main rival, said the government’s silence over its plans for Kabul Bank was troublesome.

“Kabul Bank has been funded,” Mr. Abdullah said, though he did not indicate his source for that information. “And the government should let the people know how much, and how will the people get it back. It’s the people’s money.”

Some banking officials, who blame the Western news media for inflating the crisis, insisted that Kabul Bank’s operations were routine and normal. But customers in line on Sunday said they intended either to empty their savings accounts, or to withdraw money for shopping for Id al-Fitr, the Muslim holiday later this week at the end of the holy month of Ramadan.

Lines formed as early as 3 a.m., and by lunchtime 1,800 customers had been given tickets directing them to the appropriate counter. By the afternoon, patrons were refused entry and were signing a wait list for Monday. A sweaty free-for-all scramble took place inside the bank, with depositors jousting for the attention of tellers.

“Ten years ago we had our money in pillows,” said Aimal Khan, who works as an information technology specialist at the United Nations as he waited to withdraw money. “Now we’re 10 years back. Pillows are safer again.”

Ghulam Rasul, a 27-year-old shopkeeper who sat on a piece of cardboard from 7 a.m. until 1 p.m., waiting unsuccessfully to enter the bank, called the United States “the main source of this problem.”

“If they didn’t support this corrupt government, we wouldn’t be in this trouble,” Mr. Rasul said. “Barack Obama will drown with Karzai.”

¶In other news, the Taliban on Saturday released a Japanese journalist who was kidnapped in March when he went to interview Taliban leaders in the north of the country, Afghan officials said.

The Japanese Embassy would not comment on the release of the journalist, Kosuke Tsuneoka, a Muslim. The Afghan authorities said the release was negotiated by high-ranking Afghan officials in Kabul and by the Japanese Embassy

Muhammad Omar, the governor of Kunduz Province, where the abduction occurred, said the Taliban had demanded money and the release of prisoners in exchange for Mr. Tsuneoka’s release, but he did not know if those demands had been met. He said Mr. Tsuneoka was in good health.

In the Taliban-dominated south of Afghanistan, three NATO soldiers were killed over the weekend in separate attacks.