Date:05/04/2005 URL: http://www.thehindubusinessline.com/2005/04/05/stories/2005040502560100.htm

Back Madhavpura Mercantile Co-op Bank case — ICAI council recommends removal of two members

K.R. Srivats

New Delhi , April 4

WIELDING the stick against erring members, the Central Council of the Institute of Chartered Accountants of India (ICAI) has recommended the removal of the names of two members who were auditors of the scam-tainted Madhavpura Mercantile Co-operative Bank (MMCB) for 1999-2000 and 1998-99.

The Joint Registrar (audit) of Co-operative Societies, Gujarat, in March 2002 lodged two formal complaints with the ICAI against the two auditors of MMCB.

"The ICAI council has upheld the findings of the disciplinary committee of the institute that the two members were guilty of professional misconduct. The council has recommended to the Gujarat High Court that the name of one auditor be removed for two years and that of the other for five years," sources said.

The recommendation to remove the names is being made to the Gujarat High Court as the offences of the auditors pertain to both Schedule I and Schedule II of the Chartered Accountants Act.

The Joint Parliamentary Committee on the stock market scam had highlighted in its report that the auditors had failed to point out "serious irregularities" while conducting the audit of MMCB for 1998-99 and 1999-2000.

The committee said that most rules and procedures were not being followed properly in MMCB and that "everyone was involved" in the gross irregularities in the bank's functioning. It held that all those involved must be severely dealt with soon.