The Crescent Standard Investment Bank Limited (CSIBL), the largest investment bank, was quoted on all stock exchanges in Pakistan, so that when it declared a huge loss of Rs2.1 billion (U.S. $ 35.5 million) for the year 31 December 2005, the market was taken by surprise. There were some rumors that not all is well and that the investment-banking regulator, Securities and Exchange Commission of Pakistan (SECP) had a team sent to investigate was the business of the bank. Since the main shareholders were … Read more »

The Crescent Standard Investment Bank Limited (CSIBL), the largest investment bank, was quoted on all stock exchanges in Pakistan, so that when it declared a huge loss of Rs2.1 billion (U.S. $ 35.5 million) for the year 31 December 2005, the market was taken by surprise. There were some rumors that not all is well and that the investment-banking regulator, Securities and Exchange Commission of Pakistan (SECP) had a team sent to investigate was the business of the bank. Since the main shareholders were individuals or companies known business group as the Crescent Group is known, there was great interest in the affairs of CSIBL financial and political circles as well. The case describes the different types of companies that merged to form the CSIBL, especially the actors were to be protected by the creation of a company with a large market capitalization. The bank had reported in their annual reports that all internal control mechanisms for good governance by the SECP were set in place and the auditors (internal and external) had reported that these were satisfactory. However, when subjected to an investigation, it was found that the internal management was involved in a variety of acts of deception and concealment. The case focuses on the weaknesses in the structure of corporate governance regime in Pakistan. The fact remains that no amount of internal or external audits, the internal administration of agreements to stop perpetuating a fraud.
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from
Muntazar B. Ahmed
Source: Ivey Publishing
25 pages.
Release Date: 09 October, 2008. Prod #: 908M68-PDF-ENG
Crescent Standard Investment Bank Limited – Governance Failure HBR case solution

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