CA Guilty of Entering into 8 businesses without prior permission of ICAI

One of India’s most important laws governing the chartered accountant profession is the Chartered Accountants Act of 1949. This act was passed to regulate the profession and guarantee that it is practised with the highest levels of competence and integrity.

In accordance with Rule 14(9) of the Chartered Accountants (Procedure of Investigations of Professional and Other Misconduct and Conduct of Cases) Rules, 2007, the case of CA. Rajesh Kumar Chandak was handled by the Board of Discipline, which was presided over by CA. Prasanna Kumar D. and included Mrs. Rani Nair (IRS, Retd.) as the government nominee.

It was observed that CA. Rajesh Kumar Chandak participated in and held a directorship in a number of company entities. In a particular corporate entity, he and a partner from his accounting firm constituted the sole Directors. The company engaged in commercial operations, in which they both actively participated and oversaw the administration. The fact that the CA signed the financial accounts, directors’ report, and numerous other forms belonging to the corporations shows that he was involved in the businesses’ operations.

Additionally, he signed the investment forms that the firms he was a director of had made. That is different from what a Director Simplificator does.  He failed to get the necessary authorization to participate in the general operations of the Companies and failed to provide ICAI with complete and fair disclosures.

The complainant, Sh. Vikram Singh Chopra, presented proof of Chandak’s active involvement in administrative duties, such as signing directors’ reports and financial statements, without notifying the Institute of Chartered Accountants of India (ICAI) of these involvements. 

He provided the names of the eight businesses listed below:

I. Mis Hare Krishna Properties Pvt Ltd

ii. Mis Kuldeepak Vanijya Pvt Ltd ·:–

iii. Mis Rachit Vanijya Pvt ltd

iv. M/s High Value Investments Pvt Ltd

v. Mis High Value Securities Pvt Ltd

vi. Mis Sigma Services Pvt Ltd

vii. Mis Sushwani Info Systems Pvt Ltd

viii. M/s High Value Management Consultants Pvt Ltd. 

There are several businesses where employees need to receive their salary. Additionally, Vikram Singh Chopra cited the Director’s Reports of a few private corporations, in which it was unequivocally declared that the Respondent was a director and that the company had no other Key Management.  

The Board questioned the CA about how the aforementioned companies were managed by non-executive directors in the absence of managerial positions. The Board did note, however, that CA Rajesh Kumar Chandak could not offer any convincing justifications or clarifications on the same. Chandak’s income tax returns show that he received director fees and other incomes from these organisations, demonstrated his active participation above and beyond permitted bounds.

The Board believed that he should have consulted the Council first before entering into any business ventures or pursuing any career path other than chartered accounting. As a result, the CA was found guilty of the charged offence.