In a major embarrassment to the Institute of Chartered Accountants of India (ICAI), the regulator for auditors, a Rs 100 crore-plus project initiated by its president Jaydeep Shah in his hometown Nagpur has been rejected by the statutory body's top decision-making body on grounds of being inappropriate and lacking in transparency.

Shah, who demits office after a one-year term, had initiated the project for constructing a Centre of Excellence (spread over a nine-acre campus), aimed at enhancing the skills of CA students. However, the size of the project - this was to be one of the biggest projects undertaken by the ICAI - and the manner in which it was initiated got the institute's Council suspicious, leading to the formation of an internal committee that recommended the deal's cancellation.

The ICAI Council has now accepted the decision and asked for a new deal that limits the project to just 10% of its original size and investments. "People had bypassed certain processes. And it was a breach of trust as the whole deal was kept a secret from the Council," said a member of the internal committee, requesting anonymity.

Also, lack of any tendering and absence of any competitive bids for the project raised eyebrows and were red-flagged by the committee, a Council member said.

A detailed questionnaire sent to the ICAI spokesperson and Shah on February 6 remained unanswered. Shah also did not answer text messages sent to his mobile phone.

"What was the reason to hide the whole project from the Council and clear it only through a finance committee headed by Shah himself?" a committee member said.

The panel also probed allegations that the whole deal was over-priced. "The decision to go for 10% of the original deal was taken since this is the only way we could have saved the near Rs 10 crore that had been spent as part of the first deal. This way we limited the future liability and gave an option to recover the amount already spent," the committee member said.

However, the committee did not recommend any action against Shah. "The terms of reference of the committee did not specify this. We were asked to issue a white paper on what happened, and give recommendations," the committee member said.