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ICAI to ban defaulting accountants in case of shell companies with Chinese links

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ICAI to ban defaulting accountants in case of shell companies with Chinese links

New Delhi, Sep 20 (PTI) The Institute of Chartered Accountants of India (ICAI) is setting up a separate cell for speedy disposal of cases against Chartered Accountants (CAs) involved in setting up shell companies in the country in collaboration with Chinese entities.

The ICAI said those found guilty could face a life ban and other action.

ICAI, the apex body of chartered accountants and the apex body of company secretaries, ICSI (Institute of Company Secretaries of India), have together received about 400 complaints in this matter and necessary steps have been taken.

It is alleged that Chartered Accountants (CAs) and Company Secretaries (CS) facilitated the formation of Chinese shell companies in various cities of the country without following the rules.

ICAI President Debashish Mitra told a press conference that half of the 400 numbers could be CAs and the institute has issued show cause notices to all concerned members.

Explanation has been sought from the members regarding the alleged violation of the Companies Act with regard to the formation of various Chinese companies and their subsidiaries.

Mitra said the alleged violations pertain to matters relating to constitution of the respective companies and proper verification of registered addresses.

“The CA signed the papers without verifying the registered address. The address is not correct and it is negligence.

Mitra said that prima facie a detailed inquiry has been conducted against some of the members. Such cases usually take a year but the ICAI is expecting the cases to be disposed of by the end of this year.

“We are making a separate cell to deal with these matters. The government has not given us any official deadline. But given the indications we have received, we will settle the cases by the end of the year.

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