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NTan Corporate Advisory calls for stronger MCB internal controls
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NTan Corporate Advisory calls for stronger MCB internal controls
In a much-awaited report, NTan Corporate Advisory urges the Mauritius Commercial Bank (MCB) to upgrade its internal control systems. The Singaporean forensic audit firm was appointed in March 2003 by the Bank of Mauritius (BOM) to undertake a thorough investigation of the massive embezzlement at the premier Mauritian banking organization, exposed in February last year.
NTan Corporate Advisory strongly recommends MCB to have a fresh look at the concentration of powers vested in its staff members. Furthermore, it should require all staff dealing with customers to take compliance leave when their supervisors and/or audit department review their work.
<B>Rating maintained</B>
The forensic trail probed into some practices that date as far back as the early 1990s. It revealed the various techniques used to move funds from the national pensions fund (NPF) fixed deposit accounts. The investigators looked extensively into the precautionary aspects of MCB banking practices and concluded that the bank?s traditional system of controls had been overridden.
A team of examiners from the BOM supervision department supported the investigators from Singapore. The Central bank governor, Ramesh Basant Roi, met with the MCB board members to discuss the contents of the report. The BOM however noted that the MCB had already taken steps to improve corporate governance structures since the discovery of the irregularities. The risk-prone areas of operations have been reorganized, with emphasis on establishing procedures to deal with operational hazards.
Moody?s last week?s rating of the MCB was much welcomed by the bank. The agency decided to maintain its rating at ?D?. Moody?s came to the conclusion that there was no reason to further downgrade the MCB?s standing since the latter?s goodwill had been hardly hit by the scandal. The rating agency took note of the overhaul of risk management systems to prevent possibilities of embezzlement.
In the wake of the MCB-NPF fraud, Moody?s had moved to downgrade the MCB rating from ?D+? to ?D?. Had the bank not taken the necessary steps to enhance its internal controls, there was a clear possibility that the rating would have been further lowered.
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