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Posted on December 4, 2017
Updated on September 3, 2020
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Implications for Corporate Governance Examples

The BCCI Collapse 

  • The Luxembourg-registered Bank of Credit and Commerce International (BCCI) was founded in 1972 by Agha Hasan Abedi, with HQs in Karachi and London. 
  • By 1982 BCCI operated in 78 countries, with over 400 branches, and assets exceeding $20bn, making it the 7th largest private bank in the world.
  • Following regulatory concerns and investigations BCCI was found to be established fraudulently, trading illegally on a vast scale, including money-laundering and in 1991 regulators raided and shut its operations in seven countries. 
  • Legal actions involving $100s of millions persisted for more than ten years including substantial damages settlements from BCCI auditors Price Waterhouse and Ernst Young. 
  • The BCCI scandal was a major prompt, along with Polly Peck's collapse, for the 1991/2 UK Cadbury Committee on Corporate Governance.