The Institute of Chartered Accountants of India (ICAI) has suspended the membership of Harsh Vardhan Lodha, chairman of Birla Corporation, and his brother Aditya Vikram Lodha for three months.
In a letter, Vandana D Nagpal, director (discipline), said the decision of the council was taken "upon a consideration of the joint written representation, dated July 24, received from respondents Aditya and Harsh, and also the oral submissions by them before it".
"The council ordered the names be removed with respect to allegations falling in the meaning of clause (I) of Part III of the first schedule of Chartered Accountants Act, 1949. The said punishment would run independent of the recommendations made earlier to the high court for misconduct under second schedule to the Chartered Accountants Act, 1949," the order said.
A joint complaint was made against the Lodhas in 2005 under section 21 of the Act. Incidentally, Aditya Lodha is a part of a Chartered Accountant (CA) firm Lodha & Company, while Harsh Lodha is the chairman of M P Birla Group company, Birla Corporation.
When contacted, MP Birla Group said in an email,"We are surprised to see the unsigned note being circulated by O P Agarwal and K P Khandelwal with regard to the ICAI's findings against our clients. The note is incorrect and an apparent attempt at distorting the findings of the council. It should have been mentioned the complainants had filed 15 charges of alleged misconduct against the Lodhas, of which they have been acquitted by the ICAI itself in the majority and found not guilty. Of the small number of charges remaining, we have confidence once the facts are appreciated, our clients will be absolved. There has been no finding that suggests there was any mistake in the number of partners, as has been implied in the note and our clients have acted in a transparent manner. Similar complaints had been filed with other regulatory authorities, including the Comptroller and Auditor General and Reserve Bank, a couple of years ago, which had been responded to satisfactorily by our clients to their satisfaction." Both the Birlas and Lodhas were entangled in a legal battle over the ownership of M P Birla Group assets.