A division bench of the Hyderabad High Court has ordered the Institute of Chartered Accountants of India (ICAI) to suspend a Firm of Chartered Accountants for issuing a false certification to a business firm which enabled the promoters to squander public money by inducing the general public to subscribe to the firm’s share capital. According to sources, the Firm of Chartered Accountants, M.Gang & Co, for about three years.

The bench, comprising acting chief justice Ramesh Ranganathan and justice M Satyanarayana Murthy, was disposing of a petition filed by ICAI seeking an appropriate order against M.Gang & Co,  which was appointed as a statutory auditor to Ritesh Polyster Limited, based on a letter by the Securities and Exchange Board of India seeking action against the CA firm.

SEBI said that it had conducted an investigation into the primary and secondary market transactions of the scrips of Ritesh Polyster which had come out with a public issue in 1995. It was found that the statutory auditor of the company had given a certificate on June 9, 1995 by falsely certifying that Ritesh Polyster had received `225 lakh as promoters’ contribution though their contribution was only `35 lakh. #casansaar (New Indian Express)