No Evidence to Prove CA involved in Forgery of Signature and Share Manipulation: ICAI Drops Charges [Read Order]

The Institute of Chartered Accountants of India ( ICAI ) dropped professional misconduct charges as there was no evidence to prove the involvement of the share manipulation and forgery by the Chartered Accountant ( CA ).

The complaint was filed before the ICAI disciplinary committee against CA Devendra Nath Bhardwaj. It was alleged that while acting as professional advisor to M/s VM Classes Pvt. Ltd., the CA has colluded with two other directors to fraudulently increase the company’s share capital from 15,000 to 35,000 shares, manipulate share allotment.

The Complainant has alleged that the said enhanced shares were equally allotted to the remaining two directors except the Complainant. It was also alleged that the CA has forged the complainant’s digital signatures on statutory filings, including Form-2 and MBP-1 (Notice of Interest under Section 184 of the Companies Act, 2013).

With regards to the share manipulation allegation, the respondent CA said that th:e financial statements of the Company were duly signed by the Complainant along with one other Director, and in the said financial statements for the financial year 2012-13, in Note No. 1 of the Balance. Sheet, the revised shareholding pattern has been specifically provided.

Also Read:Inadvertent DIR-12 Certification to Chinese National without MHA Clearance Not Intentional: ICAI Clears CA of Misconduct Charges [Read Order]

As the respondents submitted these, the ICAI committee observed that the complaint was fully aware about the allotment of additional shares to other two directors. Accordingly, the Respondent was held prima facie NOT Guilty of Professional Misconduct falling within meaning of Clause (7) of Part I of Second Schedule to the Chartered Accountants Act, 1949 on this aspect.

Coming to the second issue of forgery of signature, the Complainant alleged that the Respondent had misused his digital signatures without his consent. However no proof was submitted by the complainant to substantiate that his signature was handed to the CA.

The respondent-CA submitted that the report of the handwriting expert verified the signatures as genuine.

The ICAI Committee noted that while the handwriting expert report is not conclusive evidence, the Complainant did not provide substantial proof to counter it.

It was also observed that MBP-1 was filed in physical form, signed by the complainant himself, and was neither signed nor certified by the CA. Considering all these, the committee has held that the CA is not guilty of professional misconduct of both share manipulation charges and also the forgery.

Support our journalism by subscribing to Taxscan premium. Follow us on Telegram for quick updates