Banks DIH’s fraud estimated at $25M
Stabroek News
July 5, 2003

Related Links: Articles on crime
Letters Menu Archival Menu

Banks DIH yesterday confirmed it has been defrauded of an estimated $25M by employees in its sales department, had fired those involved and is moving to recover the amount misappropriated.

Seven persons have been dismissed by the beverage giant and sales executive Ramsay Ali was asked to resign. A source close to Ali said he was held responsible for the acts of misappropriation by virtue of being in charge of the department.

One manager under Ali, two supervisors and four sales staff were dismissed as a result of the discovery. The police have not been called in as the company is expecting that it will recover the full sum. Stabroek News reported on the fraud in Thursday’s edition and had been unable to elicit a response from the company for that news item.

In a statement to the media on Thursday evening, Banks DIH said it received several complaints from customers during March of this year, suggesting irregularities in the area of promotional products and activities.

“As a result, an investigation was launched by the company’s internal audit department which uncovered systematic abuse of the arrangements in the area under investigation, in that the persons charged with maintaining the integrity of the various systems had undermined and bypassed them by diverting products for their own benefit,” the statement read.

Banks estimates the loss at around $25M and said an earlier release on the fraud could not have been made on the issue as “investigations were then ongoing and could have been compromised”.

One shareholder told Stabroek News that investors ought to know how long such activities were going on and why the auditors had not picked it up.

There is concern that there is no qualified accountant on the board of the company as well and that the fraud should not be pursued as an internal investigation given that it is a public company.

The Guyana Association of Securities Companies and Intermediaries (GASCI) asked Banks DIH for information on the matter and has been sent the press release. It will meet on Tuesday to discuss whether this is adequate information within the context of the requirements for a publicly traded company.

An official at the Guyana Securities Council said it had received the statement but that it had raised several questions which the council would be looking at further.

Banks DIH is a registered issuer under the Securities Industries Act and when the private stock exchange began operations last Monday, four million of its shares were offered for sale.

While the fraud will not directly impact on the bottom line of Banks DIH, it will have an indirect impact, in that the goods intended for promotion did not go to the intended users and hence the benefits of such promotional activities to the company would be lost.

Repeated efforts yesterday to reach Azam Khan, Finance Director of Banks, for further clarifications on the issues were unsuccessful.

The police public relations department indicated yesterday that it was unaware of the fraud and could not say if the police had been notified.