Crescent Standard Investment Bank Limited – Governance Failure Harvard Case Solution & Analysis

The Crescent Standard Investment Bank Limited (CSIBL) was the largest investment bank listed on all stock exchanges in Pakistan, so when he announced huge losses Rs2.1 billion (US $ 35,5 million) for the year December 31, 2005 the market was caught off guard. There have been rumors that all was not well and that control of investment banking, securities and Exchange Commission of Pakistan (SECP), sent a team to investigate the affairs of the bank. Since the major shareholders were private individuals or companies from well-known business group known as the Crescent Group, has been a huge interest in the affairs CSIBL financial and political circles as well. The case describes the various types of entities that were merged into CSIBL, mainly to protect the interested parties by creating a company with a large market capitalization. The bank said in its annual report that all internal control mechanisms for the effective management provided SECP in place, and the auditors (internal and external) reported that they were satisfactory. However, when subjected to an investigation, it was found that the internal management was involved in various acts of misrepresentation and concealment. The case focuses on weaknesses in the structure of the corporate governance regime in Pakistan. The fact remains that there is no internal or external audit can stop the internal management of the conspiracy to perpetuate fraud. "Hide
on Muntazar B. Ahmed Source: Richard Ivey School of Business Foundation 25 pages. Publication Date: 09 Oct 2008. Prod. #: 908M68-PDF-ENG

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