ICAI Disciplinary Committee Suspends CA for 90 Days Over Fraudulent Incorporations

A complaint was filed by the Registrar of Companies (ROC), Karnataka, against CA Muni Kumar Gubiligari regarding his professional conduct in assisting with the incorporation of six companies: M/s Mefun Trading Pvt. Ltd., M/s Taelde Technology Pvt. Ltd., M/s Golden Bag Technology Pvt. Ltd. (GBTPL), M/s Hesheng Technology Pvt. Ltd., M/s Glitter Sky Technology Pvt. Ltd., and M/s Cheajeck Technology Pvt. Ltd.. These companies were alleged to be part of a network of Chinese entities operating in India, and the CA was accused of assisting in their operations by certifying fake documents.

The Complainant Department identified significant discrepancies in the e-forms certified by the Respondent, including the unauthorized use of Digital Signature Certificates (DSCs) of directors without their knowledge and apparent mismatches between the signatures on consent forms (DIR-2) and the directors’ PAN cards.

Issue Before Committee: The primary issue was whether the Respondent, CA Muni Kumar Gubiligari, was guilty of professional misconduct under Item (7) of Part I of the Second Schedule to the Chartered Accountants Act, 1949, by failing to exercise due diligence and acting with gross negligence in the certification of incorporation e-forms for the subject companies.

Committee’s Decision The Disciplinary Committee concluded that the Respondent was indeed negligent in performing his professional duties. He admitted in his statement on oath that he had blindly carried out the certification work, presuming that all information supplied by third parties was true and correct, without bothering to verify the legitimacy of the applicants or the genuineness of their signatures.

The Committee found that he had failed to verify whether directors had actually consented to their appointments and ignored clear variances in signatures on documents. Thus, the Committee held the Respondent guilty of professional misconduct under Item (7) of Part I of the Second Schedule to the Chartered Accountants Act, 1949, and ordered that the name of CA Muni Kumar Gubiligari (M. No. 234106) be removed from the Register of Members for a period of 90 days.

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