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Crescent Standard Investment Bank Limited Governance Failure case analysis

Crescent Bank Fraud
The entire board of directors and CEO Anjum Saleem of Crescent Standard investment bank were legally stopped from running their offices on evidences of suspected fraud and irregular accounting. External Auditors had predicted a missing amount of over Rs.6 Billion, apart fromillegal maintenance of parallel accounts, concealment of bank assets, un-authorized massivefunding of group companies, unlawful investments in real estate and stock market, etc. the SECPtook legal action against the companies officers, although much of the actions taken werecriticized as insufficient.


The Crescent Standard Investment Bank Limited (CSIBL)
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It provides various deposit products, including certificates of deposits, such as term, income, payment, and savings certificates; Islamic certificates; and senior citizen certificates. The bank offers various loans and advances comprising car/vehicle financing, machinery and equipment financing, working capital financing, project financing, and letter of guarantee. It also involves in term finance certificate floatation and underwriting of shares; debt restructuring and rescheduling; business sale and liquidation; and mergers and acquisitions; as well as provides feasibility studies and research reports. The bank was founded in 1990 and is headquartered in Lahore, Pakistan. As of June 28, 2007, Crescent Standard Investment Bank Limited operates as a subsidiary of Innovative Investment Bank Limited.

CSIBL case points

• Main sponsors Anjum M Saleem (Anjum Saleem was appointed as director on March 9, 2006 and bank’s chief executive on April 1, 2006) and Altaf M Saleem--used the bank’s assets illegally for personal benefits. the bank paid Rs50 million each on behalf of Altaf Saleem, sponsor of Crescent Group and Anjum Saleem, sponsor and chief executive of the bank • Facility of Rs50 million each was granted by Habib Bank Ltd to Altaf Saleem and Anjum Saleem against a pledging of equity portfolio of CSIBL. Shares of PICIC valued at Rs124.88 million,
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