Iraq issues arrest warrant for central bank chief

BAGHDAD (AP) ? Iraqi authorities have issued arrest warrants for the longtime governor of the central bank following allegations of financial wrongdoing, the country's judiciary said Thursday.

Allegations against Sinan al-Shabibi, who has led the bank since 2003, surfaced earlier this week while he was out of the country on official business. The charges are seen by the government's critics as an attempt to sideline the politically independent economist, and have been blasted as politically motivated by al-Shabibi's defense team.

Supreme Judicial Council spokesman Abdul-Sattar Bayrkdar told The Associated Press that 15 bank officials are being sought along with al-Shabibi. He did not name the other officials or say what specific charges they face. Bayrkdar did not say when the warrants were issued.

Repeated efforts to contact the Ministry of Interior, which is responsible for carrying out the arrests, were unsuccessful.

Lawyer Waleed Mohammed al-Shabibi, a relative of the bank governor who is on his legal team, said he is not aware of any arrest warrants and does not know what charges they include.

"We are told that the investigation is secret, and so far we are being kept in the dark," he said. "We demanded to know the details of the case, but up until now, we haven't gotten a clear answer."

The attorney earlier this week criticized the allegations as politically motivated. The government denies the charge.

In 2011, Iraq's Supreme Court ruled that the central bank and other previously independent bodies should be put under supervision of the Cabinet instead of parliament given that their decisions are executive in nature.

The decision was widely criticized as putting the nonpartisan nature of these bodies at risk. Among the critics was al-Shabibi himself, who considered it a threat to the country's assets abroad.

"Even if concerns that the move against Shabibi is politically motivated prove unfounded, Maliki's opponents will be wary that the prime minister could seize the opportunity to exert greater control over the (central bank)," said Jamie Ingram, a Middle East analyst at IHS Global Insight in London.

The allegations were raised by a special parliamentary committee formed to probe the bank. They surfaced while al-Shabibi was attending a meeting of the International Monetary Fund in Tokyo. He is now believed to be in Europe, where it could be difficult for the government to arrest him.

Al-Shabibi and other officials are being investigated over allegations of financial irregularities involving the exchange of Iraqi dinars for hard currency. The central bank holds daily auctions of U.S. dollars to local banks, and aims to keep the dinar stable at close to 1,200 to the dollar.

Its efforts to stabilize the currency came under pressure earlier this year as the civil war in neighboring Syria and international sanctions against Iran caused a jump in demand for dollars sold by Baghdad, according to bank officials.

The bank issued a statement Thursday saying that its dollar auctions continue as normal in an apparent bid to head off any concerns about the currency's strength in light of the allegations. Still, the scandal threatens to damage Iraq's already shaky economy.

"The confusion and mess over the central bank was unjustified. To attack public figures through media outlets is the last thing Iraq's economy needs," Iraqi economist Majid al-Souri said. "The government should have formed a committee to investigate any shortcomings and find the right solutions for better bank policies instead of launching general corruption charges against public figures."

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Associated Press writers Adam Schreck and Sameer N. Yacoub contributed reporting.

Source: http://news.yahoo.com/iraq-issues-arrest-warrant-central-bank-chief-124533160--finance.html

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