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A
great bank.
A
board of Directors consisting of 17 members. An Executive Committee
of 10 members. A Board of Auditors consisting of a Chairman and 5 regular
auditors.A major certification Company like PricewaterhouseCoopers S.p.A.
.With
this administrative and control setup (apart from anything else, expensive
- over 6,000 million), the discovery has been made, only after several
months, that a capital loss of 100 (one hundred) billion was not accounted
in the financial statements at 31.12.99.
According
to the President of the Bank, Siro Lombardini, the error came to light
during an audit for drawing up the half-yearly balance. The responsibility
lies with those who should and did not inform the directors. With adequate
accounting adjustments, any intervention will be avoided on the 1999
financial statements, which will therefore remain unchanged. Lawyers
have already been appointed to examine possible legal action against
the guilty parties".
Lombardini's
statements would seem to uphold the principle whereby the signing of
the "Directors' Report", of the "balance sheet", of the "explanatory
notes" and of the "schedules" is merely a proforma performed by the
Board without its assuming any responsibility whatsoever.
The
capital loss - that would appear to have caused the deficit - was the
result of the purchase of 400 (four hundred) billion unquoted bonds
expiring in 15 years time; this operation was part of the power of attorney
of the Managing Director and so he has to carry the can. This line of
reasoning is flawed however because the Managing Director could decide
to buy, but had no power whatsoever to indicate in which accounting
(and therefore balance) entry the bonds "should have been" (and not
could have been) placed.The responsibility of the "wrong" entry - which
would have camouflaged the capital loss - most certainly lies with who
made the entries, but equally so, with the Administrative Body, the
Control Body and the Certification Company.
Finally,
it is worth emphasising that: "the Board of Directors, by means of the
resolution of 29 June 2000 (why was it only notified on 31 October,
after 4 months?) transferred to the tied-up portfolio nearly all the
bonds in question".
This
decision is the classic attempt to find a loophole to prevent any re-edition
of the 1999 financial statements. Such "self-acquittal", "blame shifting"
and "loopholes" are anything but "consistent" with the personal and
professional competence of which the single Directors and Auditors are
individually bearers.
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