More than 400 CAs were helping Chinese companies, preparing for big action after report

The Central Government has recommended disciplinary action against 400 Chartered Accountants and Company Secretaries. They are accused that they were associated with Chinese cell companies by flouting the rules in all metro cities. According to a news in The Hindu, this action of the government is part of the steps taken by the Indian government against China and Chinese companies after the Galvan incident of 2020. 20 soldiers were killed in a violent clash with the Chinese People’s Liberation Army (PLA) in Galwan.

A senior government official said the CAs and CSs against whom the action was initiated had helped in incorporation of a large number of Chinese-owned or China-operated shell companies without complying with the rules and regulations. The Ministry of Corporate Affairs (MCA) recommended the action after receiving inputs from the Financial Intelligence Agency in the last two months. A ministry spokesperson did not comment on this.

The Institute of Chartered Accountants of India (ICAI) is a statutory body that regulates the profession of Chartered Accountancy in the country. On behalf of ICAI, it was said that the Disciplinary Directorate received reports of Chartered Accountants colluding with Chinese companies from various registrar offices in the country. Based on these complaints (Procedure for Inquiry into the Conduct of Professional and Other Misconduct and Cases) Rules, 2007. Everything will be known after a detailed investigation, it is too early to comment on this.

The Institute of Company Secretaries of India (ICSI) is yet to react on this. Income Tax officials have raided about half a dozen Chinese companies engaged in telecom, fintech and manufacturing since last October in tax evasion and other cases.

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