NDB Rs. 13.2 b fraud: The buck stops with the Board

Thursday, 9 April 2026 00:02 - - {{hitsCtrl.values.hits}}

By Faizal Salieh

The CEO attributing this fiasco to “failure in oversight rather than absence of controls” shows a serious lack of understanding of the fundamental relationship between oversight and controls as part of the control system. Failure to identify control breaches is in itself absence of controls.

The situation raises pertinent questions:

1. How long has this been going on?

2. What was the Board doing? What were the independent directors doing? Did they ask probing questions on the internal control environment and ensure adequate measures were in place against fraud risk? The CEO saying that there were no probing questions asked puts the Board in a complicit position. The Board signs off on the statement of adequacy of internal controls to shareholders and depositors.

3. How good are the regulatory supervision processes in assessing the adequacy of internal controls?

Clearly the buck stops with the Board, but there are accountabilities at the CEO, Management, Risk, Audit and Regulatory levels.

Quite a costly learning. It would be interesting to see the CEO’s, Board Committees (particularly Board Audit Committee and Board Integrated Risk Management Committee) and the entire Board’s performance evaluation outcomes for 2023, 2024, 2025 and 2026.