ICAI Suspends CA for Misconduct Involving Forged Documents & Disproportionate Assets

The Institute of Chartered Accountants of India (ICAI) has suspended Chartered Accountant (CA) T.M. Jeyachandran for 30 days due to professional misconduct involving the preparation of forged documents. The decision follows an investigation initiated by the Central Bureau of Investigation (CBI) regarding disproportionate assets linked to Dr. V.V. Sairam Babu, a former Port Health Officer at Chennai Sea Port.

Background of the Case

The ICAI’s action was based on findings from its Board of Discipline, which concluded that Jeyachandran was guilty of misconduct as defined under the Chartered Accountants Act, 1949. The misconduct stems from Jeyachandran’s involvement in preparing a false property statement on behalf of Dr. Sairam Babu, who is accused of acquiring assets amounting to Rs. 2.41 crore through forged documents.

The CBI had launched an investigation into Dr. Sairam Babu’s assets, revealing a conspiracy involving the creation of fabricated documents to misrepresent financial information. Jeyachandran allegedly assisted in this effort by producing a document titled “The Memorandum for Mutual Co-Operation,” falsely indicating a financial transaction that never took place.

Proceedings of the Investigation

The CBI’s investigation began after it received information about Dr. Sairam Babu’s disproportionate assets. It was revealed that Jeyachandran conspired with him to create false documentation to support the latter’s financial claims. The CBI further disclosed that a witness, K.P. Vasantha Kumar, a fellow Chartered Accountant, provided a confession to the CBI, stating that Jeyachandran had sent him documents related to the case.

Throughout the proceedings, Jeyachandran had multiple opportunities to present his case but failed to appear before the Board, citing health issues. His written submissions were considered, but the Board found insufficient evidence to support his claims of innocence.

ICAI’s Decision

On September 25, 2024, after considering the evidence and the submissions from both sides, the ICAI Board decided to suspend Jeyachandran for a period of 30 days. The suspension, effective immediately, was based on the severity of his actions, which were seen as a violation of the professional code of conduct for Chartered Accountants.

The Board’s decision also follows a long series of hearings, dating back to 2013, during which various adjournments and hearings were scheduled, often at Jeyachandran’s request. The protracted nature of the investigation reflects the complexity of the case, involving multiple parties and detailed examination of documents.

Jeyachandran’s Defense

In his defense, Jeyachandran claimed that the incriminating documents were planted on his computer and that he had no knowledge of their existence. He argued that forensic evidence suggested tampering with the computer, which he claimed undermined the CBI’s case against him.

Jeyachandran insisted that he followed the standards of practice required for Chartered Accountants and contended that the accusations against him were unsubstantiated. His arguments included technical details about the creation of the documents in question and the processes that were allegedly violated.

Implications of the Suspension

The suspension of T.M. Jeyachandran underscores the ICAI’s commitment to upholding professional integrity and ethical standards within the accounting profession. This case highlights the importance of accountability among Chartered Accountants, particularly in matters involving financial documentation and compliance.

The outcome of the investigation serves as a reminder to all professionals within the accounting field about the serious repercussions of misconduct. With the CBI continuing its legal proceedings against Jeyachandran, further developments in this case are anticipated.

*****

THE INSTITUTE OF CHARTERED ACCOUNTANTS OF INDIA
(Set up by an Ad of Parliament)

[PR/04/2012/DD/34/2012/BOD/153/2013]

ORDER UNDER SECTION 21A (3) OF THE CHARTERED ACCOUNTANTS ACT, 1949 READ WITH RULE 15 (1) OF THE CHARTERED ACCOUNTANTS (PROCEDURE OF INVESTIGATIONS OF PROFESSIONAL AND OTHER MISCONDUCT AND CONDUCT OF CASES) RULES, 2007

IN THE MATTER OF:

Sri C. Easwaramoorthy, IPS
Superintendent of Police, Central Bureau of Investigation,
Anti-Corruption Branch, 3^rd Floor, Shastri Bhawan,
No.26, Haddow’s Road, Nungambakkam, Chennai   … Complainant

Versus

CA. T.M. Jeyachandran (M. No.021939),
No.16, Fort East Cross Street, Shenoy Nagar, Chennai … Respondent

[PR/04/2012/DD/34/2012/BOD/153/2013]

MEMBERS PRESENT (THROUGH VC):

CA. Rajendra Kumar P, Presiding Officer
Ms. Dolly Chakrabarty (IAAS, retd.), Government Nominee

Date of Hearing and Passing of Order: 25^th September 2024

1. The Board of Discipline vide its Findings dated 27^th August 2024 was of the view that CA. T.M. Jeyachandran (M. No. 021939) is Guilty of Other Misconduct falling within the meaning of Item (2) of Part-IV of the First Schedule to the Chartered Accountants Act, 1949.

2. An action under Section 21A (3) of the Chartered Accountants Act, 1949 was contemplated against CA. T.M. Jeyachandran (M. No.021939) and communication dated 18^th September 2024 was addressed to him thereby granting him an opportunity of being heard on 25^w September 2024, which was not exercised by him. The Board noted that while expressing his inability to appear before it due to his health conditions, the Respondent requested the Board vide email dated 11^th September & 20^th zu September 2024 to pass the order considering his written submissions.

3. Thus, upon consideration of the facts of the case, written submissions and the consequent misconduct of CA. T.M. Jeyachandran (M. No.021939), the Board decided to remove the name of CA. T.M. Jeyachandran (M. No.021939) for a period of 30 days from the Register of Members.

Sd/-
CA. Rajendra Kumar P
(Presiding Officer)

Sd/-
Ms. Dolly Chakrabarty (IAAS, retd.)
(Government (Government Nominee)

BOARD OF DISCIPLINE
(Constituted under Section 21A of the Chartered Accountants Act 1949)

FINDINGS UNDER RULE 14 (9) OF THE CHARTERED ACCOUNTANTS (PROCEDURE OF INVESTIGATIONS OF PROFESSIONAL AND OTHER MISCONDUCT AND CONDUCT OF CASES) RULES, 2007

CORAM: (PRESENT IN PERSON)

CA. Rajendra Kumar P, Presiding Officer
Ms. Dolly Chakrabarty, IAAS (Retd.), Government Nominee
CA. Priti Savla, Member

IN THE MATTER OF:

Sri C. Easwaramoorthy, IPS
Superintendent of Police, Central Bureau of Investigation,
Anti-Corruption Branch, 3^rd Floor, Shastri Bhawan,
No.26, Haddows Road, Nungambakkam
Chennai… Complainant

Versus

CA. T.M. Jeyachandran (M. No.021939)
No.16, Fort East Cross Street, Shenoy Nagar,
Chennai … Respondent

FINDINGS:

BACKGROUND OF THE CASE:

1. During the course of investigation of case No. RC 3 (A)/2009 by the Central Bureau of Investigation, certain facts were highlighted and as a result allegation against Dr. V.V. Sairam Babu has been raised while he was functioning as Port Health Officer at Chennai Sea Port during the period from 01^st January 1999 to 10′^h January 2009 that he had acquired assets by creating forged and fabricated documents in his name and in the name of his wife to the tune of Rs.2,41,61,809/- which were disproportionate to his known sources of income. It came to the light that Dr. V.V. Sairam Babu and other accused entered into a criminal conspiracy and as a result the Respondent created forged and fabricated documents and in pursuance of the said criminal conspiracy, Dr. V.V. Sairam Babu had requested the Respondent to prepare a false property statement. The Respondent knowing fully well that Dr. V.V. Sairam Babu possessed assets and pecuniary resources which are disproportionate to the known sources of income had accordingly prepared false and fabricated document captioned as The Memorandum for Mutual Co-Operation” on 22^nd September 2009 as if the same was executed on 01^st August 2002 between Shri V. Loganathan, an accused in the case and Smt. V.V. Ramani, wife of Dr. V.V. Sairam Babu with a view to making false claim of Rs.55,00,000/- alleged to have been received by Smt. V.V. Ramani from Shri V. Loganathan.

2. Further, a witness Shri K. P. Vasantha Kumar S/o Shri Ponnu Swamy, Chartered Accountant, residing at No. AK-52, Flat No. A-20, 7^th Main Anna Nagar, Chennai having office at No. P3-116, 1^St Floor, 9^th Main Road Anna Nagar, Chennai has given a confession statement u/s 164 (5) of Criminal Procedure Code before the Hon’ble XII Metropolitan Magistrate, Egmore, Chennai on 11^th March 2010. In his statement, Shri K.P. Vasantha Kumar has stated that the Respondent had sent some documents for Dr. V. V. Sairam Babu through e-mail, and he downloaded the same from his office computer and handed over the print- outs to Dr. V. V. Sairam Babu.

3. Investigation by CBI revealed that the Respondent has violated the Professional Code of Conduct prescribed for the registered Chartered Accountants by the Institute of Chartered Accountants of India and recommended that a suitable disciplinary action against the Respondent for his unethical attempt to impede the investigation by way of preparing a false Memorandum for Mutual Co-Operation in favour of the accused, which was not supported by genuine transaction, be initiated. CBI is also prosecuting the Respondent u/s 120B read with Section 465, 467, 468 and 471 of the Indian Penal Code and for other substantive offences thereof before the Court of Law.

CHARGE ALLEGED:

4. The Respondent has entered into criminal conspiracy with Dr. V. V. Sairam Babu and has created forged and fabricated documents in order to account for the disproportionate assets possessed by Dr. V. V. Sairam Babu in his own name and in the name of his wife. In pursuance of the said conspiracy, the Respondent had prepared false and fabricated documents captioned as “The Memorandum for Mutual Co-Operation” on 22^nd September 2009 as if the same was executed on 01^St August 2002 between Shri V. Loganathan, an accused in the case and Smt. V.V. Ramani, wife of Dr. V. V. Sairam Babu with a view to making false claim of Rs.55,00,000/- alleged to have been received by Smt. V.V. Ramani from Shri V. Loganathan.

BRIEF OF PROCEEDINGS HELD:

5. The details of the hearings fixed and held in this matter are given as under:

BRIEF SUBMISSIONS OF THE PARTIES:

COMPLAINANT:

6. The representative appearing on behalf of Complainant department submitted that as far as the investigation is concerned, it is revealed that the Respondent has prepared false and fabricated documents for Dr. V. V. Sairam Babu which have been submitted to CBI accounting for a claim of Rs. 55 Lakhs as source income of Smt. V. V. Ramani and Dr. V.

7. Sairam Babu and he has also conspired in preparation of a Memorandum for Mutual Co-Operation. An amount of Rs. 55 Lakhs has been given to Shri Loganathan from August 2002 to July 2005. Further, during the search conducted, the documents were seized indicating disproportionate of assets and during the investigation only, the role of CA. T.M. Jeyachandran came into light and accordingly charge sheet was filed in the court which is pending before the Additional Session Judge of CBI Court at Chennai.

RESPONDENT:

7. The Respondent submits that the file containing the purported document was only planted deliberately by someone with criminal intentions to implicate him and it was not evidently created on the office computer in the normal process. This is conclusively supported by the file stampings as stated in the Forensic Lab Report (FLR), which state that the file was created at 03:35:09 PM on 22″^d September 2009, and the file was last accessed also at 03:35:09 PM on 22^nd September 2009, last written and modified also at 03:35:09 PM on the same date. Besides, the file was not found from the Respondent’s personal laptop, not even on the computer used by the Junior who helped Respondent in compilation of the cash flow statement but on the different computer assigned to and used by another Junior, Mr. Jothiram, who had nothing to do with the case and who knew nothing about the case. The presence of the other undeleted file named C381316Bd01, (the file with many blanks and incorrect data) with file stampings posterior to those of the other file named 3C99F5D9d01 clearly indicates that this file, too, was not created on the office computer at all but only was copied subsequently. The later file was copied on to the Respondent’s computer by a person with a confused mind, as this file was copied/created long after the compiled statement was finalized and submitted to CBI, still this file was created/copied deliberately on my office computer. Copying of this file belatedly exposed the cruel intentions of the person copied the same.

8. That the said Computer which was packed in cloth when it was seized, as per Mahazar (a written record of the procedures and evidence collected during an inspection), was handed over to the Forensic Lab with paper seals intact on the same. This clearly indicates that the said computer was compromised/tampered with while it was in the custody of the This is supported by the Forensic Lab Report, which states that while K.P. Vasantha Kumar’s computer was received with cloth packed and seals intact, Respondent’s office computer was received with paper sealed. This fact singularly renders all the evidence relied on by the CBI unreliable.

9. That the impugned document took physical form, and the printout was handed over even before the said document was created on the office computer. This is supported by the confessional statement made by Mr. K. P. Vasantha Kumar as well as by FLR, which states the said file’s own Id and birth object Id with their own time stampings at 09:03:32 AM on 22¹¹(‘ September 2009 remains the same (CDC69312-A756-11DE-A61E­001E9OCBD2B2). This confessional statement should be either accepted in toto or rejected in toto. A document cannot be accepted in part and rejected in another part when the document evidences only one fact. Furthermore, the said document was also not emailed from any of the email accounts. The CBI did not find any entry in the “sent” folder of any of the email accounts. Had it been there, CBI would have at least taken a screen shot of the same to prove that the said document was emailed from the email accounts of the Respondent, either on the same day, week, or month. Additionally, the evidence ^of Respondent’s office computer and the confessional statement are conflicting and are not supplementary to each other. Even the model was also not provided by the Respondent, as the model document was not found on any of the office computers of the Respondent.

10. That the file was only copied on to his computer posthumously only to implicate Respondent whereas the same was sent to Mr. K. P. Vasantha Kumar’s office email id as early as 09:03 AM itself, and the said document was printed out and handed over to Dr. V. Sairam Babu. Therefore, all the evidence drawn from FLR, coupled with the Mahazhar, suggest that the office computer of the Respondent was compromised / tampered with, goes against the charge of the CBI that the Respondent created an ante­dated document, to lend support to the accused No.1 & 2 (Dr. V. V. Sairam Babu and his spouse). It was all proved with assistance from FLR that the said document was not created on the computer of the Respondent (which means Respondent did not create; nor his office assisted in the creation and does not have any knowledge of even the existence of such document on his office computer, not to mention of the contents thereof). It was proved that said files were not created on the Respondent computer, but those were rather copied/planted onto the computer.

11. That the Respondent emailed the document to Mr. K. P. Vasantha Kumar’s email id to enable Dr. V. V. Sairam Babu to take a printout (this could become an offence/unethical only if the Respondent knew the contents of the document). It was proved that even before the Respondent made an honest call to Mr. Vasantha Kumar, the said document had reached his computer through the medium MAC of which was mentioned in the FLR. No evidence was produced by CBI to support the charge that the Respondent emailed the The “sent” folder of all the Respondent email accounts was searched by CBI and no such entry was found to evidence such a charge. More than anything else the said document is inherently incapable of lending any kind of support to the charge of CBI. The document is ridiculously lacking any financial implications and meaningless and useless and worth nothing legally.

12. That Mr. K. P. Vasantha Kumar’s statement seeks to state that Respondent sent the email with a request to take a printout and to hand over the same to Dr. Sairam Babu. The main purpose of the statement is to establish that Respondent sent the email to K. P. Vasantha Kumar, but a question arises whether such a statement would be conclusive evidence independent of personal prejudices and or personal memory slips, when other better and cogent evidence could be obtained. The better and more cogent evidence would have been a screenshot of the sent folder of Respondent’s email account concerned. A screenshot of the sent folder of email account concerned would have conclusively proved that the Respondent only sent the email or at least the email was sent from Respondent’s email account. The CBI did not include such a screenshot for the simple reason that the sent folder did not have any such entry. Alternatively, a screenshot of the inbox of Mr. K.P. Vasantha Kumar’s email account carrying an entry to that effect would have conclusively proved the point. The fact that such evidence was not filed only goes to prove that email was not sent as alleged by the CBI. Further, even if it is alleged that entries in the sent folder and inbox are deleted there are several techniques that were available to the CBI to get at the root of the email analysis, such as (1) Header Analysis, (2) Server Investigation (3) Network Device Investigation (4) Software embedded Analysis (5) Sender mail fingerprints (6) email trackers (7) Volatile memory analysis (8) attachment analysis. There are also tools using these techniques to get at the root of the email that were sent such as (1) Sinetetix, (2) Xtraxtor, (3) Aid4Mail Forensic, (4) MaitXaminer Forensic email analysis software, (5) MailPro+, (6) Advik email forensic wizard, etc ; using any of these software/tools and through email servers the CBI could have easily found out all the information relating to the email such as (1) who sent the email, (2) from which email account, (3) from which place (IP Number based location), system used therefore based on MAC (Machine Access Code) and what time the email was sent. The CBI as the premier investigative Agency must know that all these means are available to find who sent the mail and when the email was sent, and from which place the email was sent. On the other hand, why did the CBI choose to get a statement from K.P. Vasantha Kumar to unscientifically blame that Respondent sent the email.

13. That Mr. Selvakumar compiled the cash flow statement and Respondent followed the Standard on Related Services (SRS-4410) titled “Engagements to compile Financial Information”. Thus, it may be reasonably concluded that the evidence cited by the CBI, when considered properly and diligently did not even suggest the creation of the document on the office computer, not to mention proving the creation of the Memorandum for Mutual Co-Operation on the Respondent office computer as the mere existence cannot be equated to creation. When this evidence did not prove, even reasonably, it is liable to be ignored or set aside. When this evidence is considered in the light of the fact that the Respondent office computer has been tampered with, compromising its integrity, when it was in the custody of the CBI, not only this evidence but all the evidence flowing therefrom are liable to be ignored.

14. Besides above, the Respondent submits that Mr. Selvakumar allegedly said that Respondent had asked him to show some model documents, and he did show some model documents to Dr. V. V. Sairam Babu. He had also said that he saw Dr. V. V. Sairam Babu typing out some document on the computer that was seized. Respondent denies having asked him to show or provide Dr. V. V. Sairam Babu with some model documents. In the first place, the Respondent himself did not know what sort of model document was required by Dr. V. V. Sairam Babu. This evidence is again conflicting with the charge that the Respondent created the Memorandum for Mutual Co-Operation. If the Respondent was to create the Memorandum for Mutual Co-Operation, why should Dr. V. V. Sairam Babu seek a model, and why should the Respondent ask his junior to show/supply him a model? If Mr. Selvakumar’s statement is presumed to be correct and admissible evidence, it strangely supports the Respondent fact/contention that the Respondent did not create the said documents. Secondly, he also said that he saw Dr. V. V. Sairam Babu typing out on the Respondent office computer that was seized. Thus, in effect, this statement only states that Dr. V. V. Sairam Babu himself created the said documents from and out of a model shown/provided by the junior otherwise, there was no need for a model to be looked for by Dr. V. V. Sairam Babu. The statement also confirms that Dr. V. V. Sairam Babu was seen typing it on the computer. However, in the Respondent’s opinion, this statement deserves to be rubbished as it conflicts with the FLR. According to FLR, the document was only copied onto the computer and was not created. Thus, there was no possibility of Dr. V. V. Sairam Babu creating a document of that length on the computer of the Respondent.

OBSERVATIONS OF THE BOARD:

15. At the outset, the Board noted that the parties of the instant case including witnesses are present in person before it. The Board further noted that the nucleus of the allegation against the Respondent is the Memorandum for Mutual Co-Operation. As per the allegation, the said document was made by the Respondent after 22^nd September 2009 bearing the date of 1′ August 2002 for Witness No. 1 (Dr. V. V. Sairam Babu) to cover up his disproportionate source of income to the tune of Rs. 55,00,000/-.

16. The Board heard witness no. 1, who submitted that Ms. Rukmani is his wife, and she is not a partner in the Restaurant, but they were engaged in supplying of sea food to a hotel run by Mr. Loganathan initially based on oral agreement and the said amount of Rs. 55 Lakhs was received by him against the said supply. On being asked by the Board as to how he came to know CA. T.M. Jeyachandran, Dr. V. V. Sairam Babu responded that his regular CA. was Mr. Palanivelu from T. Nagar for about last 15 to 17 years and he was doing his regular filings but when Mr. Palanivelu was sick, he recommended the name of T.M. Jeyachandran to him to get the things done and accordingly he met CA. T.M. Jeyachandran for the first time. He further submitted that CA. T.M. Jeyachandran has not prepared the said documents, but it was prepared by an Advocate Mr. Balasubramaniam from Egmore.

17. The Board also heard witness number 2, who in his testimony before the Board submitted that one day, he received a call from CA. T.M. Jeyachandran who said to him as to whether he has any printer as his printer was not working and need printout of an important document which is sent to him through e-mail. Being busy, I stated that I am not available and going out because I have so much of work. Then he told to send his staff to me to give the printout to him. Next day morning, when I came to office, the concerned staff person came to take the printed material. I just gave it to him without knowing the contents thereof. Then he told me that he was sending a mail, but the message appears that the email box is full. He suggested me to delete some e-mails so that further e-mail is received. This e-mail also I have deleted. Suddenly, I received a call from CBI office to come for interrogation. I was wondering that what I did that CBI people are calling me for interrogation. Then they came with his team with CA. T.M. Jeyachandran. They were talking about this e-mail. Unfortunately, I had deleted it. CBI then seized hard disc of my ^‘

18. After hearing the parties and the witnesses, the Board is of the view that the Respondent sent the Memorandum for Mutual Co-Operation to CA. Vasantha Kumar (W-2) system so that the said document cannot be traced back to its birthplace, which is the system of the Respondent. Further, CBI took the whole hard disc of the system of W-2 and did forensic testing upon it and thereafter CBI concluded that the Respondent sent the said document on the system of the W-2 and made W-2 to take a print of it and hand it over to W-1.

19. The Board noted that the Respondent made many claims in his further written submissions, but the claims are not backed by conclusive evidence through which the Board can take assistance for the issue that the said document was not made by the Respondent by using his office system, or the said document was planted by somebody on the system of the Respondent. Further, the Respondent also claims that system of the Respondent has been tampered after being seized by CBI; the Board noted that said statement has also not been aided by any conclusive proof which can guide the Board to the direction that the said system has been tampered with. W-1 told the Board that he met the Respondent after the search took place, therefore, it is proved that the said document was made on system of the Respondent, which shows that the said document has been made by the Respondent antedated.

20. Pursuant to the detailed perusal of the documents on record and submissions made by the parties, the Board is of the view that the Complainant has been able to convince the Board that the Respondent has entered into criminal conspiracy with Dr. V.V. Sairam Babu and has thus created forged and fabricated documents in order to account for the disproportionate assets possessed by Dr. V.V. Sairam Babu in his own name and in the name of his wife. In pursuance of the said conspiracy, the Respondent had prepared false and fabricated documents captioned as “The Memorandum for Mutual Co-Operation” on 22′ September 2009 as if the same was executed on 01^5L August 2002 between V. Loganathan, an accused in the case filed by CBI and Smt. V. V. Ramani, wife of Dr. V.V. Sairam Babu with a view to making false claim of Rs.55,00,000/- alleged to have been received by Smt. V. V. Ramani from Shri V. Loganathan.

CONCLUSION:

21.Thus, in conclusion, in the considered opinion of the Board, the Respondent is ‘Guilty’ of Other Misconduct falling within the meaning of Item (2) of Part-IV of the First Schedule to the Chartered Accountants Act, 1949.

Sd/-
CA. Rajendra Kumar P
Presiding Officer

Sd/-
Dolly Chakrabarty, IAAS (Retd.)
Government Nominee

Sd/-
CA. Priti Savla
Member

Date: 27-08-2024