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34 Chartered Accountants in dock for alleged money laundering following demonetisation

India TV Business Desk New Delhi February 15, 2017 13:23 IST
India TV Business Desk

The Centre is believed to have initiated action against at least 34 Chartered Accountants for allegedly converting scrapped notes into new through shell companies during the demonetisation period.

According to a media report, the government has handed over the list of 34 names who have come under the lens of agencies to the Institute of Chartered Accountants of India (ICAI).

ICAI president Nilesh S Vikamsey on Tuesday said that action will be taken against any member who is found to be involved in wrongdoings.

The institute, he said, has started the process of identifying the names and will issue show cause notices to these professionals depending on nature of their involvement.

"... we do not even know whether they are chartered accountants or not... Let the information fully come to us and then we will look at their roles (if they are found to be chartered accountants)," the ICAI president said.

The ICAI, which has more than 2.60 lakh members, has a disciplinary mechanism in place to act against those entities violating its norms. The institute has been set up under an Act of the Parliament. Currently in case of any alleged violation, the institute first seeks explanation from the entity concerned and the matter is taken up by the disciplinary committee -- which has three elected members and two government nominees.

Vikamsey said that whichever names are clear, action will be taken and whichever names are unclear, ‘we are seeking information from the Ministry of Corporate Affairs and they are supporting us’.

“The ICAI does not have the power to temporarily suspend chartered accountants found involved in wrongdoing. We have made a representation to the government to equip us with such powers by amending the CA Act," Vikamsey said. 

The government has decided to take harsh punitive action, including freezing of their bank accounts used to launder money or evade taxes. 

News agency PRI reported that while the Serious Fraud Investigation Office (SFIO) has registered cases against 49 shell companies, as much as Rs 3900 crore has been laundered by 559 persons with the help of 54 professionals. Also, Rs 1,238 crore cash has been deposited in shell or dormant companies, post demonetisation. 

"There are about 15 lakh registered companies in India and only 6 lakh companies file their annual return. This means a large number of these companies may be indulging in financial irregularities," the PMO had said in a statement on February 10.