CA having COP held guilty for holding position of Executive Director in company: ICAI:

CA having COP held guilty for holding position of Executive Director in company: ICAI The Institute of Chartered Accountants of India (ICAI) has issued a disciplinary order against a Chartered Accountant (CA) named Saket Parasrampuria (Respondent), following a complaint filed by Shri Sushil Parasrampuria (Complainant). The matter concerns the role of the respondent in Sundar Commercials Private Limited. The complainant is the director of the aforesaid company and holds 33.5% of the total paid-up share capital of the company along with his wife. While the respondent CA holds 5% of the total paid-up share capital of the company in person and 66.2% of the total paid-up share capital along with his parents and brother.

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The complainant has raised an allegation against the respondent that he became the Executive Director of the company, simultaneously holding a Certificate of Practice as a CA, which is not permitted under the professional rules for practising Chartered Accountants (CA). On this, the respondent argued that he just acted as an ordinary/simple non-executive director and did not handle the daily operations of the company, was not paid any remuneration, and also did not provide professional services to the company. He also claimed that certain statutory filings describing him as an executive director were incorrect and not made under his control.

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When the ICAI Board of Discipline analysed the statutory filings, submissions, and the Code of Ethics, it noted that, as per the official records, the respondent CA was classified as an Executive Director of the company and that he had not taken timely steps to correct the filings. The Board ruled that, as per the rules of ICAI, a practising CA cannot hold an executive position without proper permissions or surrendering his/her Certificate of Practice. His only argument in defence was that he was just a director simpliciter; the same was rejected on the grounds of lack of supporting evidence. Considering the aforesaid findings, the ICAI Board of Discipline held the CA guilty of professional misconduct falling within the meaning of Item (11) of Part I of the First Schedule to the Chartered Accountants Act, 1949.