The Appellate Authority, recently upheld an order of the disciplinary committee of the Institute of Cost Accountants of India (ICWAI) wherein a cost accountant was held guilty of ‘Professional Misconduct’ for holding the position of a Managing Director in a Company.
Disciplinary proceedings were conducted against the appellant, a cost accountant, for accepting position as Managing Director (MD) in a company despite clearly prohibited by Cost and Works Accountants Act and Cost and Works Accountants Regulations and for accepting remuneration / fixed salary other than share in Partnership firm. It was further alleged that the appellant solicited clients indirectly by advertisement on Institute letterhead and material.
The disciplinary committee found the appellant as guilty for professional misconduct and recommended the Institute to remove the name of the appellant from the register for two year along with a fine of Rs. 25,000/-.
Upholding the order of the disciplinary committee, the Appellate Authority held that “Prima-Facie Opinion formed by the Director (Discipline) besides the Impugned Order passed by the Disciplinary Committee and observed that the Appellant was undoubtedly holding the position of a Managing Director of M/s Bizsolindia Services Private Limited as well as simultaneously holding the Certificate of Practice (CoP) issued to him by the Institute of Cost Accountants of India without seeking prior permission of the Council of the Institute, which is certainly violative of Clause (10) of Part-I of the First Schedule of the Act. Thus, we hereby reject the arguments made on behalf of the Appellant that he was not an employee of the Company. Further, we have observed from his renewal of appointment that he was possessing all necessary powers to be exercised as a Managing Director of the said Company.”
However, the Authority reduced the punishment of removal of his name from the Register of Members for a period of one year instead of two years.
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