The Board of Directors of Bhubaneswar Stock Exchange (BhSE) has decided to seek legal opinion on moving the Orissa High Court against the decision of the Institute of Chartered Accountants of India (ICAI) to exonerate the former auditor of the bourse from all charges of professional misconduct.

The decision was taken at a recent meeting of the BhSE. The Memorandum forming part of the Agenda of the BhSE board meeting pointed out that the survival of the bourse is threatened by Rs 1 crore loss arising out of the failure of the former auditor Gokul Chandra Das of M/s G C Das & Co to report the irregularities on the loan transaction to Members Welfare Trust and housing loan to executive director in contravention and violation of the provisions of the relevant statutes.

Referring to the findings of the Council of ICAI, which exonerated the auditor holding him not guilty of professional misconduct, the Memorandum said, if BhSE does not move the High Court against the findings of the ICAI Council, it would have far reaching consequence on the functioning of the bourse and amount to granting undue advantage to the former auditor.

Earlier the disciplinary committee of ICAI had found Das guilty of gross negligence and professional misconduct under Clause (5), (6), (7) and (9) of the Part I of the Second Schedule to the Chartered Accountants Act, 1949 and referred its report to Council, the apex body of ICAI, for consideration.

However, the findings of the ICAI Council holding Das not guilty after he was adjudged guilty of misconduct by the disciplinary committee of the same body, is bit surprising. So to get justice and fulfill the demand of the members of BhSE, the bourse should move the High Court against the ICAI Councils verdict, said an official of BhSE.

It may be noted, based on the complaints by the Members of Parliament and nominee of Securities and Exchange Board of India (SEBI) in the management committee of BhSE and other quarters, SEBI had superceded the earlier management of BhSE in 2003 after conducting an inquiry into the illegal siphoning of the funds out of BhSE through Member Welfare Trust (MWT) by way of loan.

SEBI in its inquiry report held the former directors and officials guilty of illegal siphoning of funds and directed BhSE to initiate criminal proceedings against the culprits.