SPECIAL CORRESPONDENT

NEW YORK - Afghanistan’s failed Kabul Bank was involved in a fraud that funnelled almost $900m into the pockets of a small number of the political elite, The New York Times reported Tuesday.

The newspaper, which obtained a copy of the audit by the Kroll investigative firm, reports that more than 92 percent of the bank’s loans went to just 19 related people and companies.

One of President Hamid Karzai’s brothers, Mahmoud, is said to be a beneficiary, but he denied any wrongdoing.

Revelations of 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.

But according to the report by Kroll Associates, when the bank’s assets were seized, the vast majority of its loans - almost $900m - were made to just 19 people and companies.

Investigators from Kroll found 114 rubber stamps for fake companies used to give forged documents a more legitimate look, the Times reported.

There is no indication in the 277-page audit report that President Karzai benefited from the fraud.

Kabul Bank’s founder and its former chairman Sherkhan Farnood and ex-CEO Khalilullah Ferozi are among several people criminally charged in connection with the bank’s collapse.

According to the Times, the bank kept two sets of books and rubber stamps for fake companies. Employees were instructed to forge documents for nonexistent businesses.

Afghan regulators seized the bank in August 2010. Western countries demanded the forensic audit along with another report, due later this week, by an Afghanistan-based anti-corruption watchdog.

The US and its allies have also threatened to cut legal aid to Afghanistan unless legal action is taken against those responsible.