The Institute of Chartered Accountants of India (ICAI) took action against the Chartered Accountant found guilty of splicing the work of assignment of preparation of statement of affairs of the company by giving a gold chain to a lawyer.
The Complainant, an ex-Director of M/s. Apex Encon Projects Pvt. Ltd. which was liquidated. The Respondent-CA Vinod Kumar Viswanath was engaged for the preparation of Statement of Affairs of the Company under liquidation together with preparation of back up provisional accounts for the financial year 2015-16 & 2016-17 and appearances before the Official Liquidator (OL) as and when required for presenting clarification that might be sought by (OL) or by the High Court.
The first allegation was that the respondent was alleged for black mailing the Complainant without parting with the soft data of the Statement of Affairs of the Company (in liquidation) solely maintained in his laptop while demanding payment of additional amounts of Rs, 5 Lacs as ransom to release the data with premeditated thought to extract unreasonable amounts from the Complainant in the eleventh hour.
Secondly, the Respondent admittedly gifted a gold chain worth Rs. 51,000/- as reference fees in lieu of getting the assignment through a lawyer cum insolvency professional. Thus, the Respondent solicited the work of assignment Of preparation of Statement of Affairs through a lawyer.
However, the Board noted that the Director (Discipline) held the Respondent Prima Facie Guilty in respect of the charge of gifting gold chain to lawyer and not guilty in respect of blackmailing. The said view of the Director(Discipline) had been accepted by the Board. Accordingly, the board took up the issue of the second allegation.
The Board noted that the Respondent was hired by the Complainant to prepare the Statement of Affairs of the Company which was under liquidation. The Board noted that both the complainant and the Respondent stated that the engagement was orally agreed and no written appointment letter was there for the said assignment(s).
The Board observed that there arose a dispute between the Complainant and the Respondent primarily on the fees or the assignment of preparation of the Statement of Affairs of the company which was not executed by the Respondent.
Further noted that the Respondent mentioned in his written submissions as well as at the time of hearing that consideration given by him to the lawyer was not associated with the above assignment but the same was gifted by the Respondent in the form of Gold chain worth Rs.55,000/- for the services provided by the lawyer like office space to work for free, free food and accommodation to his assistant, etc.
In the instant case, the Respondent has not shared his fees with a professional but has admittedly gifted him a gold chain worth Rs. 55,000/- as referral fees which is a clear Professional Misconduct falling within the meaning of Item (6) of Part I of the First Schedule, which states as “A Chartered Accountant in practice shall be deemed to be guilty of professional misconduct, if he solicits clients or professional work either directly or indirectly by circular, advertisement, personal communication or interview or by any other means”.
The board viewed the submission of the respondent CA that he did not solicit work but only shared his CV with the lawyer who subsequently referred him to the Complainant for the assignment of preparation of statement of affairs and provisional accounts and he gifted Gold chain out of Courtesy from a small amount of his earnings to the lawyer for the amenities provided by him without demanding any rent is not acceptable as the conduct and categorical admission of the Respondent that he gave the gold chain as referral fees clearly shows that he solicited his work through the lawyer which clearly amounts to Professional misconduct falling within the meaning of Item (6) of Part I of the First Schedule to the Chartered Accountants Act 1949.
Accordingly, the Board held the Respondent guilty in respect of the charge alleged.
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