Operating structure of BDBL
After reviewing the embezzlement and fraud case of the Bhutan Development Bank Limited (BDBL) for 11 months, the Office of the Attorney General (OAG), charged 12 people to Thimphu dzongkhag court yesterday.
The case, involving a BDBL official and 55 clients, amounts to Nu 576.469 million (M), where the BDBL official is accused of gaining about Nu 422M by fiddling with the system to enhance loans and collateral mortgage without the knowledge of the bank’s credit and legal divisions.
OAG charged the main accused, BDBL’s project officer, Pema Nidup, for 79 counts of embezzlement through illegal enhancements of loan amounting to Nu 403M.
He was also charged with three counts of embezzlement through forging cheques amounting to Nu 26M.
A reliable source told the media that there were several issues of not following established procedures and also lack of supervisory control that contributed to the fraud happening
(Source: Dema, T. (2018, May 22). 12 People Charged in BDBL Embezzlement and Fraud Case, Thimphu, Bhutan: Kuensel)
- (10 marks) What are the two changes that could have been brought about in the operating structure of BDBL to prevent the scam? Explain each of these reasons.
- (15 marks)With reference to the Companies Act of Bhutan, 2016, what are the three changes that could have been included in the supervisory control mechanism of the bank, which could have prevented the scam? Explain each of these changes.
- Analyze five Corporate Governance issues at Satyam which violated all the principles of corporate governance.
