Mehran Bank Corporate Governance Scandal
•
6 likes•4,504 views
CORPORATE GOVERNANCE SCANDAL MEHRAN BANK
Recommended
More Related Content
What's hot
What's hot (20)
Similar to Mehran Bank Corporate Governance Scandal
Similar to Mehran Bank Corporate Governance Scandal (20)
More from Nazish Khalid
Recently uploaded
Recently uploaded (20)
Mehran Bank Corporate Governance Scandal
- 2. CORPORATE GOVERNANCE SCANDAL MEHRAN BANK A GOOD IDEA BUT POOR FOUNDATION
- 4. MEHRAN GATE
- 5. INTRODUCTION • Incorporated in 1991 • Operated as scheduled bank in 1992 • Shares quoted in LSE and KSE • Six branches in Pakistan
- 6. Founder & COO of MBL • Mr. Younus Habib
- 7. Founder & COO of MBL • Mr. Younus Habib • Banking clerk in HBL • Suspension due to involvement in unethical business practices • Foundation of MBL with the help of political allies
- 8. Founder & COO of MBL • Mr. Younus Habib • Drained out 5 billion • Involvement in Dollar Bearer Certificate fraud • 2.2 Billion fine • 19 years of rigorous imprisonment
- 9. MEHRAN GATE • Buying loyalties of politicians • Funding for operations • Involvement in secret movement against the sitting government • SBP’s lack of independence
- 10. ACCUSATIONS • Misappropriated around five billion rupees • Transfer Rs 499 million to 39 account holders. • Bank’s COO was also convicted in DBC’s fraud case. • Advancing loans against hundreds of fake accounts • Rs 130 crore stuck up in the bank
- 11. ACCUSATIONS • Chief of army staff received Rs 24 crore as donation from COO. • Large sums had been drained off to 39 fabricated parties • Made a payment to chief of Army staff which was later transferred • New Chief Javed Ashraf Qazi of a premier intelligence agency. • Mehran Bank was unable to return the money
- 12. ACCUSATIONS • COO was also charged for being involved in the sale of land to the President of Pakistan for Rs 15 million.
- 13. FRAUD WITH STATE BANK OF PAKISTAN • Sold DBCs of 36.7 million • Out of which he gave –20 million to intelligence – Remaining spent on pressing obligations
- 14. FRAUD WITH STATE BANK OF PAKISTAN • Proceeds from the DBCs had to be deposited within 72 hours of the sale • Arrested on a complaint by the SBP for committing misappropriation in DBCs
- 15. MERGER OF MEHRAN BANK • Merger of MBL & NBP in 1995 • Provisions for MBL liabilities • Appeal by shareholders • Petition against MBL merger
- 16. ANALYSIS OF POOR CG PRACTICES • Role of management: – Enjoyed senior management position – Corruption & mismanagement of resources – Double fraud – Extra curricular banking activities – Government accounts support
- 17. ANALYSIS OF POOR CG PRACTICES • Role of regulators: – Minimum role – SBP kept in dark – SBP in vulnerable position – Control of power, authority and money – Involvement of higher players
- 18. ANALYSIS OF POOR CG PRACTICES • Role of auditors: – Weak corporate governance – Lack of independence • Ignorant • Beneficiary
- 19. ANALYSIS OF POOR CG PRACTICES • Rights of minority shareholders: – Investment by small shareholders – Share holder’s protection – Investors did not get any penny – Scape goat
- 20. VOILATION OF CORPORATE GOVERNANCE • Corporate crimes • Misuse of funds • Bribery • Chicanery • Grand larceny
- 21. VOILATION OF CORPORATE GOVERNANCE • Role of SECP • Example of violation • Principles were disregarded • Transparent and fair reporting
- 22. CONSEQUENCES • High public figures exposed • Shadowed functioning of financial institutions • Fatal outcomes for corporate sector
- 23. SURPRIZING CASH RECOVERY • COO’s agreement with NBP • Role of NAB • Successful cash recovery of 1.6 billion • Benami property sold to National Logistic Cell
- 24. CONCLUSION • Poor control of state institution • Misuse of public money by influential people • Appointment of 5 independent judges