Centre's nominee puts ICAI on the mat

A fresh crisis has engulfed the Institute of Chartered Accountants of India (ICAI). The government's nominee in its central council has shot off a hard-hitting letter to ICAI President R Bhupati on two instances of irregularities.

Sunil Bhargava also sent copies of his correspondence to all members of the central council.

In his missive, Bhargava has asked Bhupati to follow regulations with regard to two issues of administrative and financial irregularities on which the latter had sought to obtain a decision without their inclusion in the agenda.

The unusually tough letter, dated July 8, 2003, makes a shocking statement: "I feel that if a decision, on both the issues involving writing the executive committee meeting minutes for a meeting which was not at all held and regularisation of amounts claimed for foreign travel in contravention of rules framed for that purpose, is to be taken, a proper agenda with details of the past two years must be brought in. Any action without complying with rules and procedures cannot become operative."

Bhupati could not be contacted for comments. Bhargava's letter added: "I feel when an irregularity is identified related to administrative and financial malfunctioning, the right course is to come clean after proper independent inquiry and remedial action. Any institution which starts taking decisions on financial irregularities by majority begins its own decay."

Bhargava told Business Standard this evening from New Delhi that the ICAI president was seeking to declare the issue closed.

However, "If rules and procedures were broken, they should be checked at the first instance," Bhargava said.

"I have written to the ICAI stating this. If the stalemate continues and the matter is sought to be buried, it will have to be referred to the government for necessary action."

When asked whether financial malfunctioning within the ICAI, that too relating to foreign travel expenses, would harm the credibility of the institute, Bhargava said: "If the individual can be viewed as an entity separated from the institution, its credibility will not be harmed. Otherwise, there is danger of damage."

Information available with Business Standard indicates that the issues at the heart of the controversy relate to huge excesses in withdrawals of foreign exchange for overseas travel by the ICAI and non-submission of details about such expenditure despite the matter being placed before the central council for discussion.