Finance Bank
under investigation

Problems to be solved within months

The Higher Banking Commission, which is the judicial arm of the Central Bank (BDL), has instructed the newly appointed general manager of Finance Bank to investigate suspected wrongdoing at the bank and to prepare a recovery plan.

The Commission appointed Nadim Rahal in April as General Manager of Finance Bank after it discharged the bank’s board of directors and its previous Chairman Hassan Farran. The move came after Iraqi authorities took legal action against Farran on bribery allegations. The authorities claimed that Farran paid kickbacks to Iraqi officials in the Basra province to entice them to award energy projects to his company.

Rahal said that the bank has nothing to do with the alleged illegal activities of Farran which are personal matters.

The Higher Banking Commission has authorized Rahal to assume the full prerogatives of the board of directors and of the chairman-general manager. He is required to act under the Commission’s supervision and must coordinate with the chairman of BDL’s Banking Control Commission.

One of Rahal’s tasks is to identify defaulting loans and to take all measures to collect on them, including legal proceedings such as bankruptcy litigations. He said that the bank’s portfolio of treasury bills and bonds is clean and is not affected by any wrongdoing.

Rahal is also required to identify employees involved in misconduct and to take administrative and legal action against them. He is also authorized to seek the assistance of BDL’s Special Investigation Commission regarding the bank’s accounts when needed.

Finance Bank’s problems are not severe and in the process of being resolved, Rahal said, adding that he expects to complete his tasks in a few months or a maximum of one year.

Finance Bank, whose total assets stood at $553.7 million at the end of 2016, is a specialized bank mainly involved in long-term lending and in treasury bills and bonds. It is owned by Intra Investment Co. whose main shareholders include BDL, the Ministry of Finance, the Qatari state, National Bank of Kuwait, and Immofina Holding.