Khalilullah Ferozi, supposedly under house arrest, settles into a seat and orders a shisha and several plates of rice and kebab. On his wrist sits a diamond-studded watch. As he talks, getting animated, a steady spray of half-masticated kebab flies across the table.
Ferozi, a pillar of the Afghan business establishment, lost his job as chief executive of Kabul Bank last year after the Afghan Central Bank belatedly realised he had been in effect running it, along with the bank's former chairman, Sherkhan Farnood, as a giant pyramid scheme. Yet none of the other well-heeled diners at the shisha bar, largely members of Afghanistan's post-2001 nouveau riche, bat an eyelid. Nobody seems disturbed by the presence of a man who helped drain the savings of thousands of depositors totalling $579m (£359m) in a binge of insider lending by the bank's politically powerful shareholders. Because there was never any obligation to pay any interest on these "loans", the total unaccounted sum is $910m. In a country where GDP is just $12bn, that is an extraordinary figure.
The fallout has been immensely damaging as Afghanistan heads towards 2014, when the foreign presence in the country is to be dramatically reduced. One of the world's poorest nations, Afghanistan has to finance a $820m bailout of the bank and the ministry of finance is ramping up its tax collection efforts to pay for it. Public confidence in the banking system, non-existent under the Taliban, has been shattered – 24,000 safes were sold during the run on the bank last summer, as people hoarded cash at home. Of all the problems in Afghanistan the role of people close to the president, Hamid Karzai, in the scandal has soured support for the war in the US Congress. Foreign donors are refusing to make aid payments until the mess is cleared up to the satisfaction of the International Monetary Fund. If a deal isn't reached soon, the Afghan government will, within a month or so, struggle to pay civil servant salaries. (read more)