Contents

1 MTFE Scandal 6 Wirecard Scandal

First Republic Bank

2 Habib Group Scandal 7 Scandal

3 Rupali Bank Scam 8 Bank of Punjab

4 Basic Bank Scandal 9 EPPO Tax Scandal

5 Rana Plaza Collapse 10 Danske Bank Scandal

National Events
 MTFE Scandal
Overview
• Operated from 2016 to 2021, MTFE defrauded investors in Bangladesh, Nigeria, and Sri Lanka, siphoning
approximately USD 1 billion.

MTFE's Fault
• Tempted users with high returns and incentivized referrals without regulatory oversight.

Corporate Governance Failures

• Lack of regulatory oversight in Bangladesh enabled exploitation.
• MTFE's absence of user protection measures and transparency exacerbated the scam.

Impact of the Scam

• MTFE's sudden collapse in August 2021 left victims globally with significant losses.
• authorities struggle to quantify the full extent of the fraud.
 Habib Group Scandal
Overview
• The Habib Group is a prominent Bangladeshi industrial conglomerate. Founded in Chittagong in
1947.
• It has strong presence in textiles, aviation, cement, steel, real estate, insurance and banking.
Corporate governance failures
• Financial Mismanagement
• Employee Disputes
• Closure of Subsidiaries
Impact
• Economic Disruption: The collapse leads to job losses and market disruptions, causing instability.
• Investor Confidence: Decreased investor confidence follows, affecting the broader market.
• Legal Consequences: Litigation costs and regulatory penalties drain resources and hinder recovery
efforts.
 Rupali Bank Scam
Overview
• Rupali Bank Limited (RBL) crisis due to weak monitoring, poor risk management, and internal
corruption.
• Bank's failure to establish basic banking networks and contribute to economic growth.

Corporate Governance Failure

• Compromised ethical disciplines among top executives and lack of internal control mechanisms.
• Fraudulent loan allocation, mismanagement of funds through cronyism, and falsified due diligence
procedures.

Impact of the Scam

• Severe damage to public confidence and heavy financial losses.
• Decreased investor interest, impacting the economy negatively.
• Need for measures to restore trust and stability in the banking sector.
 Overview
• Duration: 2009 - 2013

Basic Bank Scandal

• Total Illegally Obtained: Nearly Tk. 4,500 crore

Governance Failures
• Lack of Board Oversight: >95% loans sanctioned without proper scrutiny
• Absence of Risk Assessment: Loans approved without due diligence
• Nepotism and Conflict of Interest: Chairman's relatives benefited
• Transparency Lapses: Disregard for regulatory standards

Impact
• Financial Loss: Depositors, shareholders, investors affected
• Economic Instability: Access to credit hindered
• Unemployment Rise: Economic instability led to job losses
• Trust Erosion: Public confidence in banking system weakened
• Legal Repercussions: Implicated individuals may face penalties
 Rana Plaza Collapse
Overview Impact
• Rana Plaza was a commercial • Loss of Lives
building located in Savar, • Reforms in Supply Chains
Bangladesh, which collapsed
on April 24, 2013. • Global Awareness

• The collapse led to the death Corporate governance failure

of over 1,100 • Neglect of Building Safety
• Lack of Regulatory Oversight
• Failure of Corporate
Responsibility
• Inadequate Worker Protection
International
Events
 Wirecard Scandal
Overview
• Duration: Started in 2015, exposed in 2020
• Key Event: In June 2020, Wirecard announced €1.9 billion missing from accounts, leading to insolvency.
• mpact: Investors, creditors, employees, customers, partners affected.

Corporate Governance Failures

• False Financial Reporting: Misrepresented financial statements, inflated profits/assets.
• Market Manipulation: Falsely increased valuation, benefiting insiders.
• Inappropriate Audit: Audit committee and external auditors prioritized self-interest, misled investors.

Impact of the Scandal

• Victims: Investors, creditors, employees, customers, partners, regulatory authorities.
• Consequences: Financial losses, disruptions, credibility damage.
 First Republic Bank Scandal
Overview
· First Republic Bank was founded in 1985 by James H. Herbert.
· The bank operated in San Francisco, specializing in lending for luxury homes, second homes, condos and co-
ops, and investment properties.
Corporate governance failures
· High proportion of uninsured deposits
· Lack of liquidity
· Credit ratings downgrades

Impact
· Depositor Uncertainty: Depositors, particularly those with uninsured funds, faced potential loss and financial
instability.
· Employee Impact: Bank employees faced potential job losses due to restructuring and cost-cutting measures.
· Consolidation Trend: JPMorgan Chase's acquisition of First Republic Bank signifies a consolidation trend,
potentially reducing competition and altering the landscape for consumers and businesses.
 Overview
• Bank of Punjab involved in badly managed affair, with deviations from loan
Bank of Punjab policy and embezzlement.
• Weak risk management and lack of internal rules highlighted systemic
weaknesses.

Corporate Governance Failure

• Poor risk management system, corruption cases, and lack of public control.
• Financial insolvency due to risky lending practices and regulatory standards
violations.

Impact of the Scam

• Global impact on banking and credit sector, shareholder and depositor losses.
• Regulatory investigations and the need for restructuring risk management
systems.
• Urgent measures required to prevent future governance failures and preserve
banking integrity
Overview of VAT Fraud Crackdown
• Date: February 28
• Operation: Led by European Public Prosecutor’s Office (EPPO) in
Munich and Cologne, supported by Europol.
• Outcome: 14 arrests, seizure of assets worth millions, spanning 17
countries.
Corporate Governance Failure
• Lack of Supervision and Due Diligence: Businesses engaged in fraud
neglected proper controls
• allowed sophisticated criminal networks to operate unchecked.
• Organizers exploited legal loopholes and complex missing trader
networks to evade taxes, undermining transparency and accountability
in business practices.

Impact of the Scam

• Financial Losses: Government, customers, shareholders, and businesses
faced significant losses, impacting tax revenue and public services.
• Economic Instability: Erosion of trust in financial system led to job
losses, reduced investment returns, and hindered economic growth.
• Legal and Regulatory Consequences: Offenders may face fines, legal
action, and criminal prosecution, with implications for all involved
parties.
• Reputation Damage: Companies involved suffered reputational harm,
affecting their ability to attract customers, investors, and business
 Danske Bank Scandal
Overview
• Involving €200 billion (~$230 billion) of suspicious transactions through Danske Bank's
Estonian branch from 2007 to 2015.
• Revealed systemic failures in internal controls and regulatory oversight

Corporate governance failure

• Lack of Oversight
• Weak Risk Management
• Culture of Compliance
• Executive Accountability

Impact
• Reputational Damage
• Financial Consequences