The Institute of Chartered Accountants of India (ICAI) has taken disciplinary action against CA Radhakrishnan AR for professional misconduct related to the certification of documents for the incorporation of M/s Tencent Fintech Private Limited. The complaint, filed by the Deputy Registrar of Companies, Karnataka, alleges negligence in his duties while certifying the SPICe form for the company’s incorporation.
The allegations primarily focus on two issues:
- The registered office address provided in the SPICe form did not correspond to any physical location upon verification.
- The rental agreement submitted for the registered office was not executed by the property owner but by another company, M/s Brickspaces Pvt. Ltd.
The Disciplinary Committee found Radhakrishnan AR guilty of professional misconduct under Item (7) of Part I of the Second Schedule to the Chartered Accountants Act, 1949, which pertains to the lack of due diligence or gross negligence in the conduct of professional duties.
During the hearing, Radhakrishnan AR admitted to his mistake in not physically verifying the registered office address but argued that his involvement was limited to the incorporation process and that he had no knowledge of any fraudulent intent by the company promoters. He requested leniency, citing the procedural nature of the error.
However, the Committee concluded that Radhakrishnan AR’s failure to physically verify the registered office address and the rental agreement before certifying the SPICe form constituted gross negligence. Despite his argument that the errors were procedural and inconsequential, the Committee emphasized that as a certifying authority, Radhakrishnan AR was responsible for ensuring the accuracy of the information provided.
Based on the evidence presented, including Radhakrishnan AR’s own admission during the investigation, the Committee ordered the removal of his name from the Register of Members for a period of two months and imposed a fine of Rs. 20,000. Additionally, failure to pay the fine within 90 days would result in an extension of the removal from the Register for an additional 30 days.