ABSTRACT

The misreporting of such matters as financial flows, assets and employee numbers has advantages in the form of evading not only tax, but also restrictions on registration under different categories of incorporation. The resulting lack of any formal structure makes it difficult to identify who owns assets, who controls the firm, and how management decisions are made. It gives to private enterprise a continuing air of shady practice that adds to the reluctance of banks to advance credit, especially as credit officers are held personally responsible for the loans they agree. To have a loan go wrong to the private sector risks greater suspicion as to why it was advanced in the first place.