100 Chartered Accountants and Company Secretaries Under Govt Scanner for misconduct

According to two people familiar with the matter who spoke on the condition of anonymity, the government has taken action against at least 100 chartered accountants and company secretaries for professional misconduct and unlawful activities, primarily their association with Chinese companies, and has directed the Registrar of Companies (ROC) to submit an action taken report.

On February 23, the ministry of corporate affairs (MCA) issued an order directing the ROCs of Delhi and Haryana to file complaints against the named chartered accountants and company secretaries with their respective professional institutes, the Institute of Chartered Accountants of India (ICAI) and the Institute of Company Secretaries of India, respectively (ICSI). A copy of the order, which specifies the names of the experts and their affiliations with 174 companies, was reviewed by HT.

“In this regard, you are hereby authorized to file a complaint against the following professionals with the relevant institutes and submit the ATR (action-taken report) as soon as possible,” read the order from the MCA’s office of the regional director (northern area).

Emails sent to the ministry, its regional director, and the ROCs in Delhi and Haryana went unanswered. The directive was sent out, according to a regional director’s office official who asked not to be identified. This person also refused to comment on why the directive was necessary.

ICAI verified the development, but ICSI did not respond to an email inquiry.

In an email response, an ICAI representative said, “Recently, the Disciplinary Directorate of ICAI has received complaints against CA Professionals, inter alia, for their engagement in regard to entities believed to be affiliated with Chinese citizens.”

The situation is being looked upon, according to the representative.

“The Chartered Accountants (Procedure of Investigations of Professional and Other Misconduct and Conduct of Cases) Rules, 2007 are being applied to the aforementioned allegations.” As a result, the alleged guilt will only be ascertained/determined after a thorough investigation/inquiry, hence it is premature to remark.”

The order makes no specific accusations against the businesses or professionals.

HT filed detailed enquiries to over a dozen companies included in this list, including approximately 25 experts, after acquiring data of corporate entities and their official emails from the ROC, requesting their views as well as clarifications from their respective CAs and CS.

“We have pursued the complaint of the Registrar of Companies and are in the process of filing our response to the Institute of Company Secretaries of India,” Huawei Telecommunications (India) Company Private Ltd, whose CS Gaurav Arora is identified in the formal order, stated (ICSI). Huawei complies with all applicable laws, rules, and regulations in India. There are no problems in the company’s operations or compliance matters.” Another company on the list is OPPO Mobiles India. When contacted via phone, its CA, Rajan Malik, declined to respond.

Alibaba Treasure Private Ltd (name of professional CA Nitin Mittal), Alibaba Trading Private Ltd (CS Harish Khurana), Alibaba Fast Food Suppliers Private Ltd (CS Konika Khurana), Alibaba Agro Foods Private Ltd (CA Nishant Gupta), Sinochem India Company Private Ltd (CS Anuradha Gupta Somani, CS Vineet Kumar Gupta, CS Naresh Kumar Sharma, Arjun Kumar Tyagi, and CS Varan (CS Arunima Kumar, CA Vijay Saini, and CA Neha Chopra).

The other experts linked with and named against the 174 companies included in the order could not be reached by HT.

“With this step, the MCA appears to be pressuring professional institutes to formulate directions and take harsh action against their members who are accused of professional misconduct,” said Maneet Pal Singh, a partner at chartered accounting firm I.P. Pasricha & Co.

“A new Accountancy Bill has also been passed by Parliament, making professionals more accountable,” he added. “Due to MCA’s rigorous activities and government engagement, this would place an additional load of obligation on experts.”

Source: Hindustan Times