CORPORATE

FRAUD

(Taj Company)

Prepared by
ANSAR ALI
Class
MBA-VI
Roll Number
L-11633
Presented to
Dr. ABDUL AZIZ KHAN

TAJ COMPANY (PVT) LTD

Publishers of The Holy Quran and Islamic Literature

Since May 14, 1929

INTRODUCTION
Taj Company was incorporated in Lahore under
the Companies Act (1913) onMay 14, 1929as a
Public Limited Company.
It started with a small capital but in a very short
time it covered a very big distance. It was
because there was a big space in the market
regarding Printing and Publishing of The Holy
Quran.

INTRODUCTION
People wanted to have a brand that they could
trust for authenticity and quality of The Holy
Quran. The company is recognized as the most
famous printing and publishing house for the
publishing of The Holy Quran all over the world.
The founder of The company Sheikh Inayatullah
died in December 1982.

PROBLEM
The Taj Company was involved in poor corporate
governance practices.The company was running a
scheme through which it was able to receive huge
amounts of deposits illegally. What was far more
disappointing was the religious affiliation the company
had attached with its name.Even 15 years after their
fraudulent practices have been stopped; the company
still owes heavy liabilities to over 25000 people.
Most of the people lost their savings as they became
victim of attractive marketing campaigns launched by
unscrupulous elements, who offered lucrative profits on
their investment. After raising heavy deposits, these
elements suddenly closed shops and disappeared.

PROBLEM
o

The company managed to attract a large number

of private investors and collected huge amount of
illegal deposits. Since the companys fraudulent
activities emerged almost 20 years ago, more than
twenty-five thousand investors are still waiting for
the recovery of the investments they made in the
company.
In another high-profile case the entire board of
directors and CEO of a bank were stopped from
running their offices because they were involved in
suspected fraud and false accounting practices.
.

PROBLEM

According to one of the reports published in a

local newspaper the companys external auditors
have estimated that at least Rs. 6 billion of
shareholders funds have gone missing.

LIQUIDATION BOARD

Financial crisis and scandal finally compelled the

Government to liquidate the company.
Government decided to close the case and made a
liquidation board. The board sold assets of Taj
Company in auction. Name, Goodwill, artistic
work, calligraphies of The Holy Quran and
available stock was sold to Mr. Abdul Basit
in2004as a private limited company.

TAJ KUTUB KHANA

Mr. Abdul Basit Sold Taj Company to Taj Kutub
Khana, Qissakhwani bazar, Peshawar in2007. Taj
Kutub Khana is a well-known organization and got
respect in the public for its remarkable work in Pashto
and Persian.
Dr. Muhammad Din (1952-2003) the founder of Taj
Kutub Khana was a well know religious scholar. He
did his PhD in Islamic studies and wrote more than
sixty books, of which many were awarded. His
translation and interpretation of The Holy Quran
named Taleem-Ul-Quran is very famous among the
youth. He trained his children in publishing and made
them capable of doing some outstanding work in their
field.

ACQUISITION

Mr. Zia Uddin CEO of Taj Kutub Khana (son of

Dr. Muhammad Din) acquired Taj Company
along with his brothers being directors in2007.

RECOMMENDATION
Taj should establish a code of conduct and disclose the code or
a summary of the code as to the practices necessary to
maintain confidence in the companys integrity, the practices
necessary to take into account their legal obligations and the
reasonable expectations of their stakeholders, the
responsibility and accountability of individuals for reporting
and investigating reports of unethical practices.
Taj Company should also establish the functions reserved to
the board and those delegated to senior executives and
disclose those functions. Companies should disclose the
process for evaluating the performance of senior executives. A
majority of the Taj board should be independent directors.
The chairman should be an independent director. The roles of
chairman and chief executive officer should not be exercised
by the same individual

END