The Order issued by the Disciplinary Committee of the Institute of Chartered Accountants of India (ICAI) pertains to a case involving CA. Ashutosh Arvind Pednekar, who has been found guilty of professional and other misconduct. The case centers on Pednekar’s signing of financial statements on a back date, which is deemed as negligent conduct and a breach of professional standards.
The Committee found Pednekar guilty of misconduct falling within the meaning of Item (2) of Part IV of the First Schedule and Item (7) of Part I of the Second Schedule to the Chartered Accountants Act, 1949. As a result, disciplinary action was initiated against him under Section 21B(3) of the Chartered Accountants (Amendment) Act, 2006.
During the hearing held on March 19, 2024, Pednekar presented verbal and written representations to the Committee. He argued that he was caught in the crossfire between the complainant and the company and that the back dating of the financial statements was a genuine error. However, the Committee determined that Pednekar’s conduct was negligent and did not meet the required professional standards.
The Committee noted that Pednekar signed the financial statements on a back date, despite the fact that other signatories had mentioned the current date while signing. This discrepancy raised concerns about the reliability and authenticity of the financial statements. Additionally, Pednekar failed to clarify or rectify the back dating issue, which further contributed to his misconduct.
Based on its assessment, the Committee concluded that Pednekar’s conduct constituted professional misconduct. It determined that he was negligent and did not take proper measures while performing his professional duties. As a result, the Committee ordered Pednekar to be reprimanded under Section 21B(3)(a) of the Chartered Accountants Act, 1949.
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THE INSTITUTE OF CHARTERED ACCOUNTANTS OF INDIA
(Set up by an Act of Parliament)
PR/152/2019/DD/175/2019/DC/1478/2021
[DISCIPLINARY COMMITTEE [BENCH-II (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
In the matter of:
Shri. Vasanth Kini
Managing Director,
M/s Titanium Industries India Pvt. Ltd,
…Complainant
Versus
CA. Ashutosh Arvind Pednekar (M. No. 041037)
…Respondent
Members Present:-
CA. Ranjeet Kumar Agarwal, Presiding Officer (in person)
Mrs. Rani S. Nair, IRS (Retd.), Government Nominee (through VC)
Shri Arun Kumar, IAS (Retd.), Government Nominee (in person)
CA. Sanjay Kumar Agarwal, Member (in person)
CA. Cotha S Srinivas, Member (in person)
Date of Hearing: 19th March, 2024
Date of Order: 9th May, 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 was, inter-alia, of the opinion that Ashutosh Arvind Pednekar (M. No. 041037) (hereinafter referred to as the ‘Respondent’) is GUILTY of Professional and Other Misconduct falling within the meaning of Item (2) of Part IV of the First Schedule and Item (7) of Part I of the Second Schedule to the Chartered Accountants Act 1949.
2. That pursuant to the said Findings, an action under Section 21B(3) of the Chartered Accountants (Amendment) Act, 2006 was contemplated against the Respondent and a communication was addressed to him thereby granting an opportunity of being heard in person / through video conferencing and to make representation before the Committee on 19th March 2024.
3. The Committee noted that on the date of hearing held on 19th March 2024, the Respondent was present in person and made his verbal representation on the Findings of the Disciplinary Committee, inter-alia, stating that he was caught in the crossfire between the Complainant and the Company. The strike off of the date below the signature of the Complainant looked like a genuine error.The Committee also noted that the Respondent in his written representation, inter-alia, stated that when he received the financial statements for signatures, they were duly signed by both directors of the Company who were duly Vasanth Kini -vs- CA. Ashutosh Arvind Pednekar authorized to sign the same and the date of 12th November, 2016 below the Complainant’s signature was struck off. Since the Complainant has passed away, there is no opportunity to cross-examine him. Whether a DIN is active or otherwise can be considered to be a technical procedure in nature and does not have a direct bearing on the relevance and reliability of the financial statements.
4. The Committee considered the reasoning as contained in the Findings holding the Respondent Guilty of Professional and Other Misconduct vis-à-vis written and verbal representation of the Respondent.
5. Keeping in view the facts and circumstances of the case, material on record including verbal and written representations on the Findings, the Committee is of the view that it has been accepted by the Respondent that he did not sign the financial statements on 21st September 2016. The Committee also noted that the Complainant in his Affidavit dated 31st August, 2019 affirmed that at the time of his signing the financial statements on 12th November, 2016, none of the other signatories to financial statements had signed and that the authentication of the financial statements is considered only after the same is certified by the management of the Company. The other Director, Sh. Lalit Surajmal Kanodia DIN 00008050 had not signed prior to his signing. DIR 12, the ‘Appointment Form’ of Director Sh. Lalit Surajmal Kanodia DIN-00008050 was certified on 11th November 2016 and uploaded on MCA-21 portal on 12th November 2016. The Committee further noted that, month and year i.e., September 2016 was preprinted on the Balance Sheet as the date of Balance Sheet of Indo-American Chamber of Commerce for the FY 2015-16 and the date mentioned on the same was written by hand as 21st.
Thus, the Committee was of the view that if the other signatories had mentioned the current date while signing then it was expected of the Respondent to either clarify regarding the same or mention the same date which was used by the others, but he signed the same on a back date. The Respondent cannot be excused for his mistakes as his conduct was in contravention of the provisions of law as well as ethical standards of the Institute. The Respondent was negligent and did not take proper measures while performing his professional duties. Hence, Professional Misconduct on the part of the Respondent is clearly established as spelt out in the Committee’s Findings dated 7th February 2024 which is to be read in consonance with the instant Order being passed in the case.
6. Accordingly, the Committee was of the view that ends of justice will be met if punishment is given to him in commensurate with his professional and Other misconduct.
7. Thus, the Committee ordered that CA. Ashutosh Arvind Pednekar (M. No.041037), Mumbai be reprimanded under Section 21B(3)(a) of the Chartered Accountants Act 1949.
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(CA. RANJEET KUMAR AGARWAL)
PRESIDING OFFICER
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(MRS. RANI S. NAIR, IRS RETD.)
GOVERNMENT NOMINEE
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(SHRI ARUN KUMAR, IAS RETD.)
GOVERNMENT NOMINEE
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(CA. SANJAY KUMAR AGARWAL)
MEMBER
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(CA. COTHA S. SRINIVAS)
MEMBER
