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Issues: (i) Whether the respondent, a practising chartered accountant, was guilty of professional misconduct for acting as a director and participating in the day-to-day affairs of several companies and a trust without the prior permission of the Institute; (ii) Whether the respondent was guilty of other misconduct by conniving with the bank manager in the diversion and withdrawal of funds through the companies and accounts with which he was associated.
Issue (i): Whether the respondent, a practising chartered accountant, was guilty of professional misconduct for acting as a director and participating in the day-to-day affairs of several companies and a trust without the prior permission of the Institute.
Analysis: The evidence showed that the respondent signed balance sheets, operated bank accounts, signed loan and overdraft documents, acted as promoter and introducer in company accounts, and was actively involved in the affairs of multiple entities. The plea that his association was merely honorary was not accepted because the material on record demonstrated substantial participation in business activities. In the absence of prior permission from the Institute, such conduct fell within the prohibited professional sphere.
Conclusion: The respondent was guilty of professional misconduct.
Issue (ii): Whether the respondent was guilty of other misconduct by conniving with the bank manager in the diversion and withdrawal of funds through the companies and accounts with which he was associated.
Analysis: The record contained evidence that the respondent submitted applications for demand drafts, operated accounts connected with the transactions, and was linked to entries and withdrawals made without corresponding funds. The material indicated that the funds were diverted through a course of conduct in which the respondent was knowingly involved, and the pendency of the criminal trial did not prevent disciplinary determination on the available evidence.
Conclusion: The respondent was guilty of other misconduct.
Final Conclusion: The reference was answered against the respondent and a penalty of removal of his name from the Register of Members for two years was imposed.
Ratio Decidendi: A practising chartered accountant who actively participates in the management and banking operations of companies without required permission, and who is found on the disciplinary record to have knowingly assisted in diversion of funds, commits professional misconduct and other misconduct warranting disciplinary penalty.
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