The disciplinary committee of the Institute of Chartered Accountants of India (ICAI) has held the former auditor of Bhubaneswar Stock Exchange (BhSE), Gokul Chandra Das of M/s. G.C. Das & Co, guilty of professional misconduct.

He has been found guilty under clause 5, 6, 7 and 9 of the part I of the second schedule read with section 21 and 22 of the Chartered Accountants Act, 1949 pertaining to charges of non-disclosure and camouflaging of material facts in the auditors report.

The council of the ICAI, the apex regulatory body of the Chartered Accountants, had earlier taken a prima facie opinion against the professional misconduct of auditor Das and ordered an enquiry into the matter by its disciplinary committee.

The disciplinary committee, headed by Uttam Prakash Agarwal, former vice-president, ICAI, has already submitted its report to the council for consideration under the provisions of regulation 16 of the Chartered Accountants Regulations, 1988, sources said.

The ICAI council is slated to meet and consider the matter on 25th March, 2010. If the concerned auditor is found guilty, then the matter shall be forwarded to the jurisdictional high court, Orissa High Court, along with the recommendation of the council as per the provisions of Section 21(5) of the Chartered Accountants Act, 1949.

It may be noted, Bhubaneswar Stock Exchange (BhSE), a public institution, had earlier lodged complaint against the auditor under Clause 5, 6, 7 and 9 of the Part I of the second schedule of the Chartered Accountants Act, 1949.

Sources said, Gokul Chandra Das, the respondent auditor, had submitted his comments on the rejoinder of BhSE which has been placed before the council of ICAI along with his written statement and the complaints of BhSE.

The members of BhSE, during the 12th Annual General Meeting (AGM), raised serious allegation on the role of Das, statutory auditor for the year 1999-2000 and 2000-2001. Allegations were made for his failure to report serious material irregularities involving siphoning off funds of the Stock Exchange amounting to Rs.88 lakh.

The fund, siphoned off by way of loan to members of welfare trust, was camouflaged in the accounts as other receivable which is contrary to the disclosure norms prescribed by the schedule VI to the companies Act, 1956.

The office bearers including president, vice-president, treasurer and the executive directors of BhSE were involved in the illegal siphoning of funds. But Das, as the then auditor, had issued a clean and unqualified report for the financial year 1999-2000 and 2000-2001 without reporting the material irregularities and misdeeds of the office bearers and management officials.