ICAI drops Charges against CA Accused of Wrongly Certifying DIR-12 for Foreign National Director [Read Order]

ICAI Drops Charges Against CA Accused of Wrongly Certifying DIR-12 for Foreign National Director

The Institute of Chartered Accountants of India (ICAI) has closed a disciplinary case against a Chartered Accountant who was accused of wrongly certifying Form DIR-12 for appointing a Chinese national as a director of a private company.

The complaint was filed by the Registrar of Companies (ROC), Kanpur, who claimed that the CA should have ensured that a security clearance from the Ministry of Home Affairs (MHA) was attached before approving the director’s appointment. This requirement had been added through a rule change for people coming from countries that share land borders with India.

According to the complaint, the CA failed to exercise proper care when he certified the form for appointing a Chinese citizen, as a director. The ROC pointed out that the form was later marked “defective” because the security clearance was not attached.

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During the proceedings, the CA explained that the rule requiring security clearance had been notified only six days before he certified the form. He said that at the time he filed DIR-12, the MCA portal had not updated the form, and there was no place to upload the security clearance.

He also stated that the director had already received his Director Identification Number (DIN) before the date of filing, and the new rule applied only when applying for a DIN, not at the stage of filing DIR-12.

The CA said that there was no bad intention on his part and that as soon as the ROC pointed out the defect, he informed the company and its auditors to correct the issue. He also submitted all relevant documents such as the director’s passport, driving licence and DIR-3 details.

 

The ICAI Disciplinary Committee reviewed the documents and the timeline. It noted that when the CA certified DIR-12 on 7 June 2022, the form available on the MCA system did not contain any field asking for MHA security clearance. The committee also found that since the director already had a DIN issued before the date of filing, the security clearance requirement did not apply in this case.

The committee observed that the CA had checked the necessary documents and acted in good faith. It ruled that there was no negligence or lack of due diligence. ICAI held the CA “Not Guilty” of professional misconduct and decided to drop the charges. The order closing the case was issued on 18 November 2025.

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