The Institute of Chartered Accounts of India is investigating allegations that a chartered account, who figures on the CBI's list of undesirable contact men (UCM), allegedly doctored balance sheets of a company. 
 

Sources said it wasn't an isolated instance, but they have been noticing this trend of balance sheets being doctored in some of the major frauds in recent cases, and in many of these cases the CAs are actively involved in it. Most noticeable is the loan fraud of Deccan Chronicle group, in which the CBI has booked among others the chartered accountants of the southern media group. 

In a communication on October 21, the disciplinary directorate of ICAI told the ministry of corporate affairs that a complaint against XXXXXXXXXXXXXXXX, the XXXXX based CA, was under investigation over allegations filed by the promoters of Packwell Manufacturers, a Delhi-based company. 

Brothers XXXXX and XXXXXXXXXXX are chartered accounts, and have figured in CBI's UCM list for years. They are accused of trying to manipulate government contracts and functioning of departments, mainly in the finance sector. 

According to complaints filed with ICAI, XXXXXXXXXXXXXX was auditor of Packwell Manufacturers, which is run by Robin Gupta and Gudiya Gupta. The Guptas have alleged that XXXXXXXXXXXX and his brother, who too is a chartered accountant, have signed and filed balance sheets of the company without their knowledge and consent. 

In a complaint filed with the ministry, the company promoters have also alleged that the ICAI has been sitting on their complaint filed first on October 7, 2013. They have told the ministry that the disciplinary directorate of ICAI had assured them several months ago that an investigation was underway, but no further progress seems to have been made. 

The institute did not respond to TOI request for clarification on the issue. 

A senior official pointed out that they are worried about the incidents of CAs being part of balance-sheet manipulations, and more importantly laxity on the part of ICAI to act against them. "We have come across a few cases, but most importantly in most of the cases the forged balance sheets are of significantly large companies," he said. 

One prominent example of recent times, he said, was of Deccan Chronicle group, the Hyderabad-based media group under investigation for running up a few thousand crore of bank loans, for repayment of which they have defaulted. The group's CAs actively connived with the promoters to submit forged balance sheets to various banks to obtain huge loans. 

The official said the ministry has often instructed professional bodies such as ICAI to act firmly against their members who bring disrepute to their service. "It is surprising why they haven't acted on the complaint of the company, especially when the accused already figures in the UCM list," he said. 

XXXXX brothers, XXXXXXX and XXXX, are prominent among the about two dozen undesirable contact men with whom the government and its officials are not supposed to do business or have contacts. The CBI suspects that they manipulate contracts and government functioning. (Times of India)