Alleged fraudulent accounting irregularities have been uncovered at Burgan Bank. Note 26 of the bank's financial statements, signed by chairman and managing director, Abdulaziz al-Nabhan, says: 'The external auditors identified certain fraudulent ccounting irregularities in respect of an externally managed investment portfolio and reported the matter to the board of directors who immediately suspended certain members of the senior executive management team who were involved with these irregularities.'
An extraordinary board meeting in late May accepted the resignation of the Al-Nabhan.
The bank's auditors, Pricewaterhouse-Coopers, Ernst & Youngand Al-Bazie & Company, uncovered the activities and described them in their report to the shareholders.
'During the course of our audit, we identified certain fraudulent accounting irregularities... The board of directors and the new senior executive management have conducted extensive investigations and, accordingly, a loss of KD 5 million [$16.2 million] has been recorded in the income statement for the year ended 31 December 2002.
In this connection the investment manager of this portfolio has confirmed that it is holding $133 million on behalf of the bank and will release it after certain formalities are completed,' reads the auditors report.
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