Professional Misconduct: ICAI take disciplinary action against 200 Chartered Accountants

The CA Institute has issued disciplinary notices to more than 200 chartered accountants for their alleged assistance in recent years in assisting various Chinese enterprises violate the Companies Act 2013 through their India-incorporated subsidiaries and shell companies.

In order to prevent the abuse of the profession, the Institute of Chartered Accountants of India (ICAI) has delivered notices of alleged misconduct to 200 practitioners.

According to ICAI President Debashis Mitra, we aim to wrap up this situation as soon as possible. He further noted that the processes were handled with “highest priority.” The government reportedly forwarded a list of 400 professionals, including CAs and company secretaries, to the ICAI and Company Secretaries Institute before taking this step.

While the Registrar of Companies (RoCs) had objected in some cases, in others, the issue was viewed as an information case. In June of this year, the ICAI claimed that hundreds of CAs nationwide were being investigated by the CA Institute.

In recent years, the Center has tightened its foreign direct investment (FDI) rules for investments coming from nations with India’s land border. It seemed like an effort to limit Chinese investments in Indian businesses. While the Foreign Direct Policy was modified in April 2020 to require the Center’s approval for investments coming from these nearby nations, the Corporate Affairs Ministry (MCA) had already stipulated in June of this year that citizens of those nations must obtain the Home Ministry’s clearance if they were to be appointed directors of Indian companies.

The Foreign Exchange Management Act (FEMA) compliance declaration must be provided at the time of incorporation for enterprises that receive investments from nations that share a land border, according to recent rule revisions announced by the MCA.