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    C094 - IAP107 - Sustainability and Strategic Audit

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    CIMB Bank is a leading universal bank headquartered in Malaysia. It faces some issues including an insider trading scandal where two senior managers were charged with sharing non-public information. To address this, CIMB should implement blackout periods, regulate employee trades, provide compliance training, and clearly define what information is public. Additionally, Malaysia is expected to see high ringgit-denominated bond issuance in 2017 to fund infrastructure projects. CIMB can help clients manage this by offering bond ladders and adjusting bond durations when interest rates rise.

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    C094 - IAP107 - Sustainability and Strategic Audit

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    studentone
    121 views5 pages
    CIMB Bank is a leading universal bank headquartered in Malaysia. It faces some issues including an insider trading scandal where two senior managers were charged with sharing non-public information. To address this, CIMB should implement blackout periods, regulate employee trades, provide compliance training, and clearly define what information is public. Additionally, Malaysia is expected to see high ringgit-denominated bond issuance in 2017 to fund infrastructure projects. CIMB can help clients manage this by offering bond ladders and adjusting bond durations when interest rates rise.

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    C094_ IAP107_ Sustainability and Strategic Audit (1)

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    CIMB Bank is a leading universal bank headquartered in Malaysia. It faces some issues including an insider trading scandal where two senior managers were charged with sharing non-public information. To address this, CIMB should implement blackout periods, regulate employee trades, provide compliance training, and clearly define what information is public. Additionally, Malaysia is expected to see high ringgit-denominated bond issuance in 2017 to fund infrastructure projects. CIMB can help clients manage this by offering bond ladders and adjusting bond durations when interest rates rise.

    Copyright:

    © All Rights Reserved
    Download as PDF, TXT or read online from Scribd
    Download as pdf or txt
    121 views5 pages

    C094 - IAP107 - Sustainability and Strategic Audit

    Uploaded by

    studentone
    CIMB Bank is a leading universal bank headquartered in Malaysia. It faces some issues including an insider trading scandal where two senior managers were charged with sharing non-public information. To address this, CIMB should implement blackout periods, regulate employee trades, provide compliance training, and clearly define what information is public. Additionally, Malaysia is expected to see high ringgit-denominated bond issuance in 2017 to fund infrastructure projects. CIMB can help clients manage this by offering bond ladders and adjusting bond durations when interest rates rise.

    Copyright:

    © All Rights Reserved
    Download as PDF, TXT or read online from Scribd
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    of 5

    C094: IAP107: Sustainability and Strategic Audit

    JOANNE CARLA Y. JACOBO


    Asynchronous Activity
    September 27, 2022

    Answer the following questions:


    1. Make a profile of the CIMB Bank
    2. Make an analysis of the problem and
    3. Prepare necessary actions and recommendations regarding the scenario

    COMPANY PROFILE

    Logo

    Company Name Commerce International Merchant Bankers (CIMB)

    Headquarters Kuala Lumpur, Malaysia

    Year Established 1974

    CIMB Investment, CIMB Bank, CIMB Niaga. CIMB Securities


    Brands
    International, CIMB Thai

    Vision To become a leading ASEAN Company

    Provide universal banking services as a high performing,


    institutionalized and integrated company located in ASEAN and key
    Mission
    market beyond, and to champion the acceleration of ASEAN
    integration and the region’s links to the rest of the world.

    At CIMB, sustainability is one of the strategic themes of our


    FORWARD23+ strategy. This means, we are committed, in intent
    and by design, to demonstrate sustainability leadership while
    balancing growth with responsibility.
    Sustainability Mission
    As a leading universal bank, we aim to integrate environmental,
    economic, and social (EES) considerations into all aspects of our
    business. We will also invest resources and work with our
    stakeholders to create net positive impact on society and
    environment.
    CIMB’s Value Creation Model

    CIMB CORPORATE STRUCTURE


    INTERNAL FACTOR ANALYSIS SUMMARY

    ○ Strong Capital Position


    ○ New Product Innovation and Adoption
    Strengths ○ High Technology
    ○ Diversification of Product and Service
    ○ Strong Brands

    ○ High Interest Rate


    Weaknesses ○ Poor Customer Service
    ○ Focus on ASEAN Countries Only

    EXTERNAL FACTOR ANALYSIS SUMMARY

    ○ Growth in International Banking


    ○ Economic Growth
    Opportunity
    ○ Political Stability
    ○ Large Customer Base

    ○ Fluctuation in Foreign Exchange Rate


    ○ Competition
    Threats
    ○ Same Business Segment
    ○ Financial Liberalization

    ANALYSIS & RECOMMENDATION OF THE PROBLEM

    Problem 1: CIMB issues statement on insider trading scandal

    1. The Securities Commission of Kuala Lumpur charged three


    individuals including two CIMB Investment Bank Bhd former senior
    managers for insider trading offenses under Section 188 of the
    Capital Market and Services Act 2007

    2. Section 188 of the Capital Market and Services Act 2007 states that
    ○ A person is an insider if that person possess information that is
    not available to the public - a person would not expect it to have
    a material effect on the price
    Facts & Analysis ○ An insider shall not acquire, dispose and enter into an
    agreement with regards to the acquisition or disposal of
    securities; shall not directly or indirectly procure an agreement
    with the securities
    ○ The insider shall not communicate the information that relates
    on a stock market of a stock exchange
    ○ Source:https://www.sc.com.my/api/documentms/download.ashx?id=70b43137
    -9a48-4540-b955-f1114ceb3445

    3. Persons Involved:
    ○ Name: Ewe Lay Peng
    ○ Age: 45
    ○ Position: Senior Managers - Corporate Finance Department
    ○ Charged with one count of communicating non-public
    information between Dec 10, 2007 and Dec 31, 2007 to Lim
    Bun Hwa

    ○ Name: Lim Bun Hwa


    ○ Age: 41
    ○ Position: Senior Managers - Corporate Finance Department

    ○ Name: Lim Boon Cheng


    ○ Age: 47
    ○ Relationship: Lim Bun Hwa’s brother
    ○ Five Charges for acquiring 145,000 units of PacificMas Bhd
    shares between Dec 18, 2007 and Dec 31, 2007, while in
    possession of material non-public information.

    4. SC alleges that the material non-public information referred to in the


    charges were related to the proposed conditional take-over offer by
    OSPL Holdings Sdn Bhd (OHSB) to acquire all voting shares in
    PacificMas not already owned by OHSB.

    5. CIMB failed to conduct due diligence and prevent insider trading.

    1. CIMB should have blackout periods, which means that there is a


    period wherein officers, directors and other related people are
    temporarily blocked from purchasing the company’s securities
    before the earnings announcement.

    2. CIMB should also regulate their officers, to clear their purchases


    and sales of the company’s securities to avoid violations of security
    law.
    Recommendations
    3. CIMB should partake in webinars, seminars and programs with
    employee conduct which relates to insider trading.

    4. CIMB should have a clear policy and define what information is


    meant to be distributed to the public.

    5. CIMB should also conduct due diligence to their employees,


    investigating employee backgrounds, etc.

    Problem 2: Malaysia's CIMB Sees Ringgit Bond Issues Hitting 5-Year High in 2017

    6. The chief executive of CIMB Investment Bank said that


    Ringgit-denominated bond offerings in Malaysia are rising due to the
    financing needs of infrastructure projects
    Facts & Analysis
    7. Bond offerings in ringgit – including sukuk Islamic bonds – are
    expected to rise to a range of 80 billion ringgit to 90 billion ringgit

    8. Infrastructure spending in Malaysia has increased over the last year


    as Prime Minister Najib Razak aims to build momentum and boost
    the economy ahead of a general election that he has to call by
    mid-2018

    6. CIMB should offer or recommend to clients the bond ladder.

    7. CIMB should cut down the duration of bonds when interest rates are
    Recommendation rising from a financial need of the government.

    8. CIMB should offer their trusted client (a few to avoid loss) a lower
    rate to avoid loss.

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