Icai To Crack Whip On 9 Cas

The Institute of Chartered Accountants of India (ICAI) today said of the 65 entities under probe for their alleged involvement in the 1992 stock scam, the executive committee would take a decision on punishment in nine cases and another two have been referred to the High Court for a final award of penalty.

Talking to reporters, ICAI president Ashok Chandak said the institute had decided to launch investigations against 65 entities, comprising over 200 chartered accountants as against the joint parliamentary committee's recommendation of investigations against 17 auditors.

He said as on June 3, in 57 cases, investigations had gone beyond the stage to establish prima facie violations and 52 of these cases the disciplinary committee had completed its investigations and finalised its report. While in 11 cases violations had come to light, in 41 cases the committee could not find the accused guilty. Chandak also said that there were only eight entities in whose case the institute was yet to get prima facie evidence for reference to the disciplinary committee.

 

He said the entire process was taking time, though the JPC report was released in December 1993, owing to the failure of concerned agencies such as the Reserve Bank of India to furnish information in time. Chandak said that information including circular issued by RBI started trickling in only after June 1994.

Chandak also said that ICAI is proposing an increase in the number of members in the executive council from 30 to 40 and the number of government nominees, who could be from any of the regulatory agencies, is proposed to increase to eight.

The increase is part of the amendments to the Chartered Accountants Act, 1949 which also includes enhancement of punitive powers of ICAI.

Citing that of the 1,650 cases of misdemeanour in the professional practice referred by it to the high courts, only in one case the court had enhanced the punishment, while in another four cases, the punishment recommended by it was reduced, he said.

Though ICAI is seeking powers to procure balance sheets and other information from RoCs, companies and auditors, Chandak said the institute was not asking for search and seize powers.

ICAI has also proposed to merge the existing two schedules of offences in the Act to a composite act for reducing the stage of inspection to three from the present 5-6 steps. The offences would then be categoriesd into three classes.