The Hindu Business Line : Cash-for-transfer bribery scandal — ICAI initiates disciplinary action against member

THE Institute of Chartered Accountants of India (ICAI) has now initiated the process that would trigger the disciplinary mechanism proceedings against the Chennai-based Chartered Accountant, Mr A. Krishnamurthy, who is alleged to have been the middleman in the cash-for-transfer bribery scandal that led to the resignation of Minister of State for Finance, Mr G.N. Ramachandran.

"Based on the news reports, we have sent a letter to the person concerned. The disciplinary mechanism process has been initiated even though there has been no formal complaint or reference on him to the ICAI," the President of the ICAI, Mr R. Bupathy, told Business Line here.

The latest action of ICAI comes at a time when its own disciplinary mechanism has in the recent past come in for close scrutiny. There has been professional as well as public concerns over the time taken in the disposal of disciplinary proceedings.

Section 21 of the Chartered Accountants Act provides for disciplinary action against a member of the ICAI for professional and/or other misconduct. The regulations framed under the Act define the framework and procedures by which the disciplinary proceedings must be conducted.

The Government is already contemplating amendments to the Chartered Accountants Act to improve the functioning of ICAI's disciplinary mechanisms and ensure prompt action on professional misconduct.

The Department of Company Affairs (DCA) appointed Naresh Chandra Committee on Corporate Audit and Governance had recently recommended that an independent prosecution directorate be created within the ICAI to exclusively deal with all disciplinary cases and expedite the process of enquiry and decision making by fully devoting its time and energy towards processing these cases.

The Committee had recommended that the Prosecution Committee should have the same powers as those vested in a civil court under the Code of Civil Procedure, 1908 regarding the i) discovery and production of any document and ii) receiving evidence on affidavit.

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