Accounting watchdog ICAI comes under Competition Comm scanner
March, 13th 2014
Finding prima facie evidence of violations, Competition Commission has ordered a detailed probe against accounting watchdog ICAI with regard to alleged discriminatory practices in organising professional education programmes for its members.
It is alleged that the Institute of Chartered Accountants of India's (ICAI) policy on Continuing Professional Education Scheme (CPSE) is discriminatory and abusive.
The complaint filed by Arun Anandagiri, who is a qualified chartered accountant, has said the institute's CPE policy does not allow any other organisation to provide the service of holding CPE seminars other than that offered by ICAI's programme organising unit.
Observing that there "seems to be force in the allegations", the Competition Commission of India (CCI) has ordered its Director General to carry out a detailed probe against the institute in the matter.
The watchdog refers cases to DG when prima facie there is evidence of violating competition norms.
"If during the course of investigation, involvement of any other party is found, the DG shall investigate the conduct of such other parties including conduct of group companies..," the order dated February 28 and released today said.
The probe could also look into the role of persons who were in charge of and were responsible for the conduct of the businesses of such companies.
ICAI's non-regulatory function of organising CPE seminars, restricting the same only to itself and its organs, "prima facie appears to be an arbitrary exercise of its powers and thus in contravention of the provisions of Section 4 of the (Competition) Act", the order noted.
According to the Commission, it is not the case that the activity of ICAI in organising CPE seminars is a not-for-profit exercise.
Citing ICAI's annual report for 2012-13 period, the complainant has submitted that the institute earned gross revenues of Rs 45 crore from organising seminars and conferences, that accounted for around eight per cent of the the institute's total revenue.
As per the Commission, members of the institute "had no option but to attend the seminars organised by ICAI (whatever be the quality of seminars) to get the requisite CPE credits.
"The restriction put on by Opposite Party (ICAI) does not meet the objectives sought to be achieved by the policy," it noted.
"As conditions for these product/services from demand and supply aspects are distinctly homogeneous throughout India, relevant geographic market would be pan India. As such, relevant market would be organising recognised CPE seminars/workshops/conferences in India," the order said.
CPE are aimed at enabling ICAI members to maintain the requisite professional competence and to ensure high quality and standards in professional services they render.