Hyderabad: The Hyderabad High Court has ordered the Institute of Chartered Accountants of India to suspend a Hyderabad-based Chartered Accountancy firm from practising for a period of three years for falsely certifying a company. The said company induced the general public to subscribe to its share capital which enabled its promoters to squander public money.
A division bench comprising Acting Chief Justice Ramesh Ranganathan and Justice M. Satyanarayana Murthy was disposing of a case referred by the Institute of Chartered Accountants of India, seeking the HC to pass an appropriate order against the firm M/s M. Gang & Co, which was appointed as Statutory Auditor to Ritesh Polyster Ltd. based on a letter by Securities and Exchange Board of India seeking action against the Chartered Accountancy firm.
The Sebi stated that it had conducted an investigation in the primary market and secondary market transactions in the scrip of the company that came out with a public issue in 1995.
The Sebi informed the court that based on the auditor’s certificate, promoters were allotted shares worth Rs 2.25 crore.
During the course of hearing, counsel for the auditor urged the court that since the incident took place in 1995, a lenient view should be taken.
After considering the various cases, laws and judgments of the Supreme Court, the bench said “The professional misconduct attributed to the respondent is grave and serious in nature which affects public confidence, and their faith in the integrity and impartiality of the Chartered Accountants and the Institute of which they are members.”
The bench felt that “taking a lenient view, or exonerating such professionals would encourage others to indulge in similar acts and completely erode the faith of the general public in the impartiality and integrity of the members of the Institute, and bring the Institute itself into disrepute.”
The bench said, “We find it appropriate that the respondent herein should be suspended from practising as a Chartered Accountant for three years from September 1, 2016 to October 31, 2019.”
