India's accounting regulator is not famous for the speed of its investigation and disciplinary actions. This week, a five-year old ICAI probe into the accounting affairs of the Global Trust Bank (GTB) finally came to an end. The ICAI disciplinary committee has held two GTB auditors, P Ramakrishnan and Manish Agarwal guilty of professional misconductboth of whom are PricewaterhouseCoopers (PwC) employees.

Where is this case likely to head next? CNBC-TV18s Ashwin Mohan looks for some answers.
 
It was one of India's biggest banking collapsesin 2004, large scale financial irregularities were uncovered in private sector Global Trust Bank. As the government stepped in, the Reserve Bank of India (RBI) asked the accounting regulator, the Institute of Chartered Accountants of India, to probe GTB's books and its audit firm. It's taken ICAI five long years to come up with some answers. This week, the Institute's central council gave effect to its disciplinary committee report finding.

The verdict?Two PwC auditors in charge of GTB during the financial year 2000-2001 have been found guilty of professional misconduct.

Uttam Prakash Agarwal, President, ICAI: The council has recommended the High Court that P Ramakrishnan name should be removed from the register of members for five years and Manish Agarwals for a period of three years.

Kamlesh Vikamsey, Former President, ICAI: As far as the Chartered Accountants Act is concerned and professional misconduct is concerned, there are two schedulesboth spelling out different misconducts.

In case of Schedule 1, the council itself awards a punishment after going through the due process of hearing to the member concerned. Schedule 2 is for misconducts which are graverafter the Disciplinary Committee and Council have decided, the matter is referred to the High Court and the High Court awards a punishment. Thats basically how the disciplinary function works.

There is also a third accusedPwC's S Gopalakrishnan, who is already facing trial in the Satyam accounting fraud. The verdict against him is still pending.

Agarwal: We, as a council, cannot delay the matter. Today the Council has decided that since he is in police custody, we will send one final notice that his report would be heard by the Council after 60 days. Accordingly, he may be directed to send his written submission or representation through his counsel or appear before the Council.

The GTB case has often been used to criticise ICAIs slow disciplinary proceedings. The institute hopes that this verdict, though five years in the making, will help salvage its reputation.

Agarwal: The public at large, who lost some of the confidence or faith in the disciplinary system of the institute, will realise that since we are the quasi-judicial body, and to follow the principals of natural justice, we have to give proper time as per acts and regulations.

But even now, it's up to the High Court whether or not to endorse the ICAIs recommendation to de-roster the two auditors. Further hearings will be held before the case arrives at a final outcome.
 
Vikamsey: Most of the matters that have gone to the High Court under the second schedule misconduct, the court has accepted recommendation. Even in terms of awarding punishment, the recommendation of the council is accepted. In some cases the courts have also said recommendation of the council is very harsh and have reduced the punishment. But there are never cases where the High Court has said the recommendation of the council, the punishment is not enough and they have increased the punishment.

You know what they sayjustice delayed is justice denied. It makes you want to askwhat if ICAI had been quicker to press charges against PwC's S Gopalakrishnan? Would it have helped blow the lid off the Satyam scam earlier?

In response to these developments, Lovelock & Lewes, a PwC member firm, said: "The partner concerned is still to receive a copy of the ICAI Central Council recommendation. It would not be appropriate for us to comment on it. Also, it is our understanding that the High Court will give the partner concerned an opportunity to present his case before deciding on the recommendation of the ICAI Central Council.