The accounting regulator is finally swinging into action in the multiple demat account scam that was detected over 3 years ago.

The Disciplinary Committee of the Institute of Chartered Accountants of India (ICAI) has found the internal auditors Haribhakti & Co. guilty of negligence while checking the books of brokerage firm - Karvy. ICAI's Disciplinary Committee has found one audit partner and audit manager of Haribhakti & Co. guilty.

Sources say that of the 3 charges that were framed, they have been found guilty on only one charge.  The Central Council, which is the highest decision making body of ICAI, will now either ratify or overrule the report of the disciplinary committee.

The Central Council is likely to decide the fate of the 2 auditors next month. To give a brief background of the case, Sebi had unearthed a multiple demat accounts scam in the year 2006.

A person named Roopalben Panchal opened thousands of demat accounts and illegally cornered shares in various IPOs. Sebi, in its April 2006 order, among others, faulted the internal auditors of Karvy Haribhakti, for failing to detect thousands of demat accounts being opened with the same address.