Kabul Bank fraud: Sherkhan Farnood and Khalilullah Ferozi jailed

Two former chiefs of Afghanistan's Kabul Bank have been sentenced to five years in jail for the multi-million dollar fraud that almost led to its collapse in 2010.

Founder and former chairman Sherkhan Farnood and ex-CEO Khalilullah Ferozi were tried in a special court.

Revelations of massive corruption led to a run on the bank in 2010.

Foreign donors bailed it out fearing its failure could lead to the collapse of Afghanistan's fragile economy.

The bank handled most of the government payroll, including salaries for policemen and teachers.

A report by an independent auditor leaked in November 2012 showed that the vast majority of the bank's loans - almost $900m (£561m) - were made to just 19 people and companies.

An earlier finding by Afghanistan's anti-corruption office said that $467m (£290m) of outstanding loans were made without appropriate collateral.

The two men have the right to appeal, reports the Associated Press news agency.

Source: BBC News (05/03/2013): http://www.bbc.co.uk/news/world-asia-21666689