“Off the Books” Share Purchase Allegations: ICAI Disciplinary Committee finds CA not Guilty of Misconduct

The Institute of Chartered Accountants of India (ICAI) has acquitted a Chartered Accountant (CA) of misconduct allegations related to an “off the books” share purchase. The CA was accused of facilitating the illicit transfer of funds for share purchases by a Maharashtra-based firm. The Income Tax Department’s investigation revealed that the firm received large share-capital amounts from two Kolkata-based companies, which lacked the financial capacity for such investments. The CA, who served as a director of the firm, claimed his role was limited to advisory and that the investor companies were compensated “off the books.” The ICAI Disciplinary Committee, after reviewing the evidence, found no proof of the CA’s complicity in the alleged misconduct. The committee appreciated the CA’s submission and recognized the lack of evidence to hold him guilty. Consequently, the CA was acquitted of all charges, highlighting the importance of thorough investigations and evidence-based conclusions in disciplinary proceedings.