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Summary

The Crescent Standard Investment Bank Limited (CSIBL) was the greatest investment bank
reported on all the stock marketplaces in Pakistan when it declared a massive insufficient Rs 2.1
billion (US$35.5 million) for your year December 31 2005 industry was surprised. The
investment banking regulator Opportunities and Exchange Commission of Pakistan (SECP) had
sent an organization to check out the matters in the bank. Since the primary traders were people
or companies in the well known business group known to as Crescent Group there s enormous
fascination with the CSIBL matters by financial and political circles. The case describes the
different organizations that have been merged to produce the CSIBL mainly to guard the
stakeholders by creating a company getting a sizable capital. The bank had reported within the
annual reviews the interior control systems permanently governance stipulated with the SECP
were in place as well as the auditors (internal and exterior) had reported they were acceptable.
Yet when uncovered to have an analysis it absolutely was states the inside management was
involved in many functions of misrepresentation and concealment. The case focuses on the flaws
inside the structure in the corporate governance regime in Pakistan.

Company introduction
Crescent Standard Investment Bank Limited, an investment bank, provides corporate finance and
advisory services in Pakistan. 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

26 million and SSGC Rs3. 2006). payment against personal running finance facilities of Rs100 million tantamount to embezzlement of funds of CSIBL • The directors of the bank were made irrelevant transactions and the actual transactions and reports were not approved by the board. 2006 the facility of CSIBL of Rs100 million towards Altaf Saleem and Anjum Saleem had been settled by way of premature encashment of Certificates of Investment (COIs) to the tune of Rs95. PIA Rs15. it was admitted that the management of the bank had been guilty of unlawful and fraudulent conduct.O. in violation of the stipulated conditions for holding the licenses in terms of the NBFC Rule. It was also pleaded that the board of directors was not aware of such conduct.88 million. Vohra transaction and the sale of assets of the bank without the board’s prior approval or knowledge “bring me to the sad conclusion that the board at best is irrelevant at the bank • Directors of the bank were also quoted in the third inspection report of the SECP commission that they were not aware of the illegal working of the management • The bank had been maintaining double books to hide its transactions and was found involved in investment in its own subsidiary companies • The equity of the bank had been eroded to the tune of Rs2. therefore. .04 million as well as mark-up (on April 10.082 billion (in negative) as of August 26. “So it does not have the minimum regulatory equity of Rs300 million as required for the business of investment finance services. The bank is.• 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. 2006. • Show cause notices issued by the SECP to the directors.29 million were pledged. Chairman and director of the bank Manzur ul Haq said in a letter to the commission that recent events like the unearthing of the J. CSIBL got its equity portfolio released from the HBL that was initially pledged by CSIBL to enable Altaf Saleem and Anjum Saleem to obtain running finance facilities • As CSIBL had already paid to Altaf Saleem and Anjum Saleem their principal amount of Rs95.04 million except outstanding COIs of nominal amount of Rs4. • By April 10. SNGPL Rs1.55 million. Shares of PICIC valued at Rs124. therefore. and Rs200 million as required for the business of leasing.62 million to be matured in September and October 2006 • Due to the payment of Rs100 million.

including Rs1. Conclusion Top directors and CEO of the company were the main culprits and responsible for loss to all stakeholders. • The SECP commission issued order for suppression of board of directors and appointed Badarud-Din Khan to exercise all powers and duties of the board with effect from August 30.termpaperwarehouse. The deposits of Sialkot International Airport Limited are Rs555. FPCCI Rs29.120 billion of corporate and institutional clients.com/essay-on/Cresent/306061 . All these things take company to the point where it was unable to meet its liabilities.com/crescent-standard-investment-bank-failure-case-study-review/ http://www. The stock markets did not have a clue about their doings.85 per share. The accounts show a loss of Rs 2.50 million.118.com/doc/30524941/Corporate-Governance-in-Pakistan http://bohatala. • The commission received numerous complaints from individuals as well as institutional depositors of the bank regarding inability of the bank to meet its liabilities towards them. The External Auditors gave a clean chit.57 million. Wapda Rs300 million.929 billion deposits of individuals and Rs4.scribd.000 or loss per share (Rs 16.• The bank’s total deposits showed a figure of Rs6. 2005 to its shareholders and that too after eight and a half months. 2007 • The Crescent Standard Investment Bank Limited (CSIBL) will go down in record books as the bank has circulated “un-approved and un-audited” annual accounts for the year ended December 31. https://www. • CSIBL fails to pay Rs 68. 2006.85) which means the entire equity stands eroded and the share value is a negative Rs 6.546.049 billion. Point of concern is that the Credit Rating Agency could not know about their dealings.547 million of TFCs to fund holders • SECP suspends trading in CSIBL shares The Securities and Exchange Commission of Pakistan (SECP) has directed all the three stock exchanges to suspend trading in the shares of Crescent Standard Investment Bank Limited (CSIBL) for a period of 60 days from April 3.50 million and Barrett Hodgson Pakistan Rs28 million. National Telecommunication Corporation Rs309.