The Pune chapter of Institute of Chartered Accountants of India (ICAI) has suspended a training contract outsourced to a popular chartered accountancy training academy, Zaware's Professional Academy Pvt Ltd, following allegations related to conflict of interest.

The matter assumes significance considering that SB Zaware, the proprietor of the academy, is an ICAI central council member and ICAI headquarters has also sought the relevant documents relating to the allegations from the Pune office.

G Ramaswamy, president, ICAI headquarters, New Delhi told over the phone, "We are aware of the suspension of the contract and are collecting details from our Pune office. We will cross verify the details before taking any action."

Pune chapter chairman, Vijaykant Kulkarni confirmed that the training contract with the Zaware Academy had been suspended. "We have sent relevant documents to our Delhi office and await their guidelines and instructions," he said.

Zaware denied a conflict of interest in the issuance of the contact to him. He said he was not a council member when the agreement for the training programme was signed with him in July 2009. He refuted the charge that he had made profits out of the training programme.

The suspension of the training contract follows a complaint lodged by a city-based chartered accountant to the ICAI headquarters in New Delhi and the Pune office on September 12, raising questions of conflict of interest and lack of transparency in the awarding of the contract to Zaware Academy.

According to the complaint, Zaware was issued a contract to conduct the 7-day orientation course for chartered accountancy aspirants in July 2009 by the ICAI, Pune chapter under the chairmanship of Milind Gramopadhye, who was serving as the statutory auditor of the Zaware Academy.

The ICAI rules specify that the training had to be undertaken by the ICAI branch itself. Zaware was later elected as council member of the ICAI headquarters in December 2009 and he continued to run the training programme without informing the ICAI headquarters. The matter came to light only as late as August 2011 during the annual general body meeting of the ICAI, Pune chapter, when some members raised questions about 'related party payments'. It was then that the ICAI treasurer realised that cheques were being made in favour of the Zaware Academy.

According to Zaware, ICAI Pune had paid him Rs1,000 per student for his services and he had trained a total of 449 students from February 2010 to September 2011, after being elected as an ICAI member. Zaware said that the monies being made to him barely covered his costs, claiming that he paid Rs725 per hour to his tutors.

When asked as to why he had not informed ICAI headquarters about the contract, he said, "There is no provision in the ICAI rules which demand a disclosure. In any case, I did not inform the ICAI as there was no profit being made."

This is not the first time that controversy has rocked the ICAI, Pune chapter. DNA on January 6, 2010 ('Aggrieved ICAI members move court') had reported how two members had moved court demanding a stay on the 2010 ICAI, Pune chapter elections. The court had subsequently granted the stay and re-elections were held. (Times of India)