The entire Board of Directors of Crescent Standard Investment Bank Limited (CSIBL) has been suspended, and its Chief Executive Officer (CEO), Anjum Saleem, has been restrained from officiating as CEO of the Bank, with immediate effect, by the Securities and Exchange Commission of Pakistan (SECP).
In a press release issued here on Wednesday, the SECP said that the action had been taken under sections 282E and 282F of Companies Ordinance, 1984. At the same time, it announced appointment of Badr-ud-Din Khan as Administrator of CSIBL.
The SECP press release said that the action had been taken after months of exhaustive investigations into the bank''''s affairs, which revealed "severe and deliberate violations of legal requirements and serious financial irregularities, including but not limited to illegal maintenance of parallel accounts, concealment of bank assets, unauthorised massive funding of group companies, unlawful investments in real estate and stock market, etc".
The appointment of Administrator had become inevitable to protect the interests of the depositors and stakeholders and to stem the fast eroding asset base of SCIBL. The SECP took prompt action for ensuring that the bank''''s affairs should be managed in a clean, transparent, and professional manner through the appointment of an Administrator, the SECP release said.
During the course of investigations, an opportunity was given by SECP to the former management to redress vital issues concerning the viability of the bank and the protection of financial interests of its depositors. No substantive measures were initiated by the suspended management to honour any of its commitments, it said.
The SECP also proactively engaged the sponsors and management of the CSIBL to revive the bank, but all such efforts were frustrated by deliberate non-co-operative stance of the former, the Commission added.
As the apex regulatory authority, it was incumbent upon the SECP to protect the interests of the depositors and financial institutions. This unprecedented action was taken after all avenues were exhausted, it said.
Show-cause notices have been issued to the suspended CEO, Board of Directors members and other relevant functionaries of CSIBL to take cognisance of irregularities committed at the bank. Pending the outcome of proceedings, the bank''''s affairs shall be managed by the administrator appointed by SECP.
The administrator, Badr-ud-Din Khan, is ranked among the country''''s top bankers and, among other posts, has also served as Chairman and CEO of National Development Finance Corporation (NDFC), Chairman & CEO of Industrial Development Bank of Pakistan (IDBP), Founder-President & Chief Executive Officer of Gulf Commercial Bank Limited, and has also served at top posts in Bank of America during his over 18-year long association with the bank. He has also served on the boards of large corporations, including Hub Power Company, Fauji Fertiliser, National Investment Trust, State Cement Corporation, etc.
Amongst his other varied pursuits, he has also served as Chairman, New Private Scheduled Commercial Bank-Pakistan Association, Vice Chairman, Pakistan Banks Association etc, the SECP added.
Earlier, the SECP had directed CSIBL to cease extending financial facilities to its holding subsidiary or associated companies, which included the following: Shakarganj Mills Limited, Crescent Leasing Corporation Limited, Crescent Standard Modaraba, Safeway Mutual Funds Limited, Asian Stock Funds Limited, International Housing Finance Limited, Crescent Commercial Bank Limited, Picic Commercial Bank Limited, Pakistan Industrial Credit & Investment Corporation Limited, Crescent Standard Business Management (Pvt) Limited, Magrib Development Corporation (Pvt) Limited, Crescent Standard Aviation (Pvt) Limited, Crescent Brokage & Investment Services Limited, Crescent Capital Management (Pvt) Limited, Crescent Standard Business Management (Pvt) Limited, Crescent Ujala Limited, Crescent Standard Telecommunications Limited, Crescent Steel & Allied Products Limited, Crescent Modaraba Management Company Limited, Altern Energy Limited, Crescent Bahuman Energy Limited, Crescent Bahuman Limited, Crescent Sugar Mills & Distillery Limited, Crescent Textile Mills Limited, Crescent Knitwear Limited, Crescent Industrial Chemicals Limited, Crescent Group Engineering (Pvt) Limited, and Crescent Jute Products Limited.-PR
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