The Disciplinary Committee of the Institute of Chartered Accountants of India (ICAI) has found CA. Ramesh Kumar Maheshwari guilty of professional misconduct. This ruling, dated June 26, 2024, follows a complaint filed by the Serious Fraud Investigation Office (SFIO), Ministry of Corporate Affairs. The committee, led by Presiding Officer CA. Charanjot Singh Nanda, with Government Nominee Shri Jugal Kishore Mohapatra and Member CA. Chandrashekhar Vasant Chitale, heard the matter on April 2, 2024.
CA. Maheshwari was held guilty under Clauses (5), (6), (7), and (8) of Part I of the Second Schedule to the Chartered Accountants Act, 1949. These clauses pertain to a Chartered Accountant in practice failing to disclose a material fact known to them which is not disclosed in a financial statement, failing to report a material misstatement known to them to appear in a financial statement, being grossly negligent in the conduct of their professional duties, and failing to obtain sufficient information to warrant the expression of an opinion, or expressing an opinion without obtaining such information, respectively.
During the hearing, CA. Maheshwari stated that his audit relied on documents provided by the company’s management and that information regarding the collection of deposits was suppressed, preventing him from fulfilling reporting requirements under Section 58AA of the Companies Act, 1956. He claimed he had no reason to suspect irregularities and that all relevant working papers were seized by the CBI.
However, the committee found that CA. Maheshwari failed to produce any third-party evidence to support his claims or demonstrate the application of specific audit procedures. The committee noted his inability to account for the whereabouts of working papers and his failure to request copies from the CBI. The investigation revealed multiple instances of misstatements across various group companies, including false security premiums, false investment reporting, and the non-accounting of public deposits disguised as non-convertible debentures and fixed deposits. The committee concluded that CA. Maheshwari, as an independent Statutory Auditor, did not exercise due diligence or apply professional skepticism in his audit.
Given these findings, the Disciplinary Committee ordered the removal of CA. Ramesh Kumar Maheshwari’s name from the Register of Members for a period of three months and imposed a fine of ₹1,00,000/- (Rupees One Lakh only). The fine must be paid within 90 days of receiving the order. Failure to pay the fine within the stipulated period will result in an additional one-month removal from the Register of Members.
THE INSTITUTE OF CHARTERED ACCOUNTANTS OF INDIA
(Set up by an Act of Parliament)
[DISCIPLINARY COMMITTEE [BENCH-I (2024-2025)]
[Constituted under Section 21B of the Chartered Accountants Act, 1949]
ORDER UNDER SECTION 21B(3) OF THE CHARTERED ACCOUNTANTS ACT, 1949 READ WITH RULE 19(1) OF THE CHARTERED ACCOUNTANTS (PROCEDURE OF INVESTIGATIONS OF PROFESSIONAL AND OTHER MISCONDUCT AND CONDUCT OF CASES) RULES, 2007.
[PR/235/2016/DD/261/2016/DC/1578/2022]
In the matter of: –
Serious Fraud Investigation Office,
Through Sh. K.S. Kaushik,
….Complainant
-Vs-
CA. Ramesh Kumar Maheshwari
M/s. Maheshwari K R & Co.
Chartered Accountant……Respondent
MEMBERS PRESENT: –
CA. Charanjot Singh Nanda, Presiding Officer
Shri Jugal Kishore Mohapatra, IAS (Retd.) (Government Nominee)
CA. Chandrashekhar Vasant Chitale, Member
Date of Hearing : 2nd April 2024
Date of Order : 26.06.2024
1. That vide findings under Rule 18(17) of the Chartered Accountants (Procedure of Investigations of Professional and Other Misconduct and Conduct of Cases) Rules, 2007, the Disciplinary Committee noted that CA. Ramesh Kumar Maheshwari, (hereinafter referred to as the Respondent”) was held GUILTY of professional misconduct falling within the meaning of Item (5), (6), (7) & (8) of Part I of Second Schedule to the Chartered Accountants Act, 1949.
2. That pursuant to the said findings, an action under Section 216(3) of the Chartered Accountants (Amendment) Act, 2006 was contemplated against the Respondent and communication was addressed to him thereby granting opportunity of being heard in person / through video conferencing and to make written & verbal representation before the Committee on 2nd April 2024.
3. The Committee noted that on the date of the hearing held on 2nd April 2024, the Respondent was present through video conferencing, and he made his verbal submission on the findings of the Disciplinary Committee.
4. In his verbal submission the Respondent inter alia stated that they have done the audit on the basis of facts that have been produced before them. He further submitted that the Company has suppressed the facts regarding collection of deposit.
5. The Committee considered the reasoning as contained in the findings holding the Respondent Guilty of professional misconduct vis-a-vis verbal submissions of the Respondent.
6. Keeping in view the facts and circumstances of the case, material on record including verbal submissions of the Respondent on the findings of the Committee, the Committee is of the view that the professional misconduct on the part of the Respondent is established. Accordingly, the Committee ordered that the name of Respondent i.e., CA. Ramesh Kumar Maheshwari be removed from the Register of members for a period of three months and a fine of Rs. 1,00,000/- (Rupees One Lakh only) be imposed upon the Respondent to be paid within 90 days of receipt of the Order. If the Respondent fails to pay the fine within the stipulated period, his name be removed from the Register of Member for an additional period of one month.
Sd/-
(CA. CHARANJOT SINGH NANDA)
(PRESIDING OFFICER)
Sd/-
(SHRI JUGAL KISHORE MOHAPATARA),
I.A.S. (RETD.), (GOVERNMENT NOMINEE)
Sd/-
CHANDRASHEKHAR VASANT CHITALE
(MEMBER)
Place : 26.06.2024
Date : New Delhi
