Kabul Bank’s principal shareholders under asset freeze

The Afghan Central Bank ordered the ban on asset sales in a letter reviewed by The Washington Post. Sent to Kabul municipal authorities, it targets five people, including Kabul Bank’s two biggest shareholders — who were ousted last Monday as executives of the bank — and the brother of Afghanistan’s vice president, who is both a shareholder and major borrower.

No restrictions were placed on the president’s own brother, Mahmoud Karzai, who has also borrowed money from Kabul Bank, including $6 million that he used to buy a 7 percent stake in the now-crumbling bank.

“They couldn’t freeze my property because I don’t have it,’’ said Mahmoud Karzai in a telephone interview from Kabul. “I don’t have a single house or parcel of land in my name in Afghanistan.’’

Afghans frequently register their assets in the names of relatives or trusted friends. Mahmoud Karzai spends much of his time in Dubai, where he lives in a luxury villa purchased for $5.5 million with Kabul Bank funds.

The move to block asset sales comes as Afghan authorities are struggling to hold Kabul Bank together against waves of depositors demanding their money back. Amid reports that bank funds have been stolen in several cities, authorities want to try to stop bank insiders from selling assets purchased with loans that haven’t been paid back.

The crisis at Kabul Bank, which still has more than a million customers and handles salary payments for soldiers, police, and teachers, flows from a tangle of murky loans by shareholders to themselves and from risky investments in Dubai real estate.

With so many people’s savings, salaries, and political fortunes at stake, what began as a financial mess has morphed into a serious challenge to the credibility of President Karzai and also of his American backers.

Washington has ruled out using any American money for a bailout, despite fears that the collapse of Kabul Bank could leave soldiers unpaid and set back the fight against the Taliban, a struggle in which the United States has already lost more than 1,100 troops and has spent billions of dollars.

The Central Bank letter was signed by Noor Ahmad, head of the general office. It was first obtained by Tolo News, an Afghan 24-hour news channel. Central Bank officials could not be reached for comment.

Some Afghan officials want the Central Bank to seize shares in Kabul Bank that were not paid for in cash. Around half the shares — including those of the president’s brother and also of the brother of the vice president — were purchased with Kabul Bank loans. These loans, said Kabul Bank’s founder and former chairman, are all still outstanding. Transferring the shares would lead, in effect, to the partial nationalization of Kabul Bank.

“I’m not in favor of nationalization,’’ said Mahmoud Karzai, who suggested that the government simply lend Kabul Bank cash “when our money is finished.’’

The Afghan Central Bank, aided by Treasury Department advisers, is scrambling to work out a rescue strategy for the coming days, when Kabul Bank’s money is likely to run out. Since the panic began last week, withdrawals over just three business days have drained more than half of the $500 million Kabul Bank said it had in liquid cash.

Yesterday, armed officers from the country’s national security agency surrounded the bank’s headquarters in downtown Kabul and ringed its perimeter with concertina wire. The officials parked three pickup trucks in front of the building, including one mounted on the sidewalk by the main entrance, as throngs of depositors again waited to withdraw their cash.

President Karzai ordered on Saturday that police take over guard duties at Kabul Bank’s scores of branches across the country. Security had previously been handled by a company run by the brother of Kabul Bank’s former chief executive, Khalilullah Fruzi.