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CRESCENT STANDARD INVESTMENT BANK LIMITED —
GOVERNANCE FAILURE1

Muntazar Bashir Ahmed wrote this case solely to provide material for class discussion. The author does not intend to illustrate either effective or ineffective handling of a managerial situation. The author may have disguised certain names and other identifying information to protect confidentiality.
Ivey Management Services prohibits any form of reproduction, storage or transmittal without its written permission. Reproduction of this material is not covered under authorization by any reproduction rights organization. To order copies or request permission to reproduce materials, contact Ivey Publishing, Ivey Management Services, c/o Richard Ivey School of Business, The University of
Western Ontario, London, Ontario, Canada, N6A 3K7; phone (519) 661-3208; fax (519) 661-3882; e-mail cases@ivey.uwo.ca.
Copyright © 2008, Ivey Management Services

Version: (A) 2008-12-12

KET Securities Limited’s head office at Karachi in Pakistan had been receiving unofficial reports since
May 2006 that there had been a number of frauds at Crescent Standard Investment Bank Limited (CSIBL).
This was confirmed when the bank did not circulate the audited accounts for the year ended December 31,
2005, even as late as August 2006. Early in September 2006, a business analyst at KET was asked to investigate what the press had been reporting. Management was shocked to read the information the newspapers had published (see Exhibit 1). He was to submit an analysis for senior management who had recently deposited some of the company funds as an investment in CSIBL, and he wondered what he should recommend.
CSIBL was part of the well-reputed Pakistani business conglomerate known as the Crescent Group and members of the group, individuals as well as companies, were also its majority shareholders.

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