New rules could force Azizi bank chairman out

New laws forbidding shareholders from holding management positions in Afghan banks could force the chairman of the country’s second-largest bank to resign, the National has reported.

Merwiss Azizi, chairman of Azizi Bank, has close ties with Dubai via extensive investments in the unfinished Palm Jebel Ali project and Nakheel’s suspended Al Furjan villa project.

The potential resignation stems from the fall-out over a run on the struggling Kabul Bank, which has made $150m of investments in Dubai property, the newspaper added.
 
Kabul Bank had lost as much as $180m as customers closed accounts, and the government deposited $100m to make up the shortfall.

The general secretary of the Afghanistan Banks Association said the situation was now “under control”, but that higher corporate governance measures would be implemented as a result.

“In the coming weeks, we are going to ask other chairmen and executives who are also shareholders to resign,” Aimal Hashoor, a spokesman for the Central Bank – which is enacting the new rule – told the National.

However, while Azizi Bank welcomed the proposal, a senior official from the bank told Arabia Business that the Central Bank’s proposal would need to be accepted by the Ministry of Finance.

“A grace period of six months is being offered before any propositions are put forward by the Ministry,” said Farhad Azizi, vice president of Azizi Investments. 

“Also, at Azizi Bank all operational and strategic activities are authorized by the CEO, who from day one is a non-shareholder of the Bank.”

Azizi Investments is a Dubai-based company owned by Merwiss Azizi, which has at least six plots of land on the stalled Palm Jebel Ali project, according to data on the Dubai Real Estate Regulatory Agency (RERA).

Another of Azizi’s Dubai-based firms is Azizi Hotak General Trading Group, which has petroleum interests in Afghanistan and Kazakhstan.