--- title: Eight family companies called a chartered accountant a Director Simplicitor. The signatures on file said otherwise. description: A chartered accountant sat on eight family company boards for years, signing their filings. The Board found the role went past a Director Simplicitor's; no punishment order has been published. case_number: BOD 582/2020 file_number: PR-188/2017-DD/247/2017/BOD/582/2020 forum: board-of-discipline institute: icai decided_on: 2024-05-20 outcome: Pending clauses: Item (11) of Part I of the First Schedule order_pdf: https://disc.icai.org/wp-content/uploads/2024/05/2.-BOD-582-2020.pdf published: 2026-09-10 author: Jainam Shah keywords: bod 582 2020, bod 597 2021, director simplicitor, item 11 part i first schedule, regulation 190a chartered accountants regulations, engaging in business or occupation without permission, board of discipline findings pending punishment, rule 14 9 findings source: /icai/board-of-discipline/bod-582-2020 --- # Eight family companies called a chartered accountant a Director Simplicitor. The signatures on file said otherwise. A Kolkata chartered accountant sat on the boards of eight private companies — some belonging to his own family, some to the family of his partner in the same accountancy firm.[^parties] A complaint from inside that partner's family told ICAI he was running those companies, not simply attending their meetings.[^companies] ## What happened ```timeline A Kolkata chartered accountant, in practice for more than thirty years, takes director's seats in eight private companies over the years, some belonging to his own family and some to the family of his partner in the same accountancy firm. Company law lets a chartered accountant hold such a seat without special permission, so long as it stays what the rules call a Director Simplicitor: attending board meetings, drawing only a sitting fee, and doing nothing more. Year after year he signs the companies' directors' reports, financial statements and statutory forms, sometimes as the only director on hand to do it. In three of the companies he also takes a fee for certifying forms filed with the Registrar of Companies. A dispute breaks out inside his partner's family, and he is nominated to arbitrate its settlement. The award does not satisfy one of the family members involved, and that member takes the paperwork on all eight companies to the Institute, arguing that a director who merely attends meetings does not sign what this one has signed. The Institute's screening finds a case to answer, and years later a hearing follows. Twice under questioning, the accountant is asked how eight companies with nobody senior to their directors were actually run day to day, and who handled their banking. The Board studies the signed reports, his tax records and the companies' own constitutions, and finds the role went well past a nominal directorship. Its findings, once reached, sit unissued for more than two years and are released only after a High Court order directs the Institute to clear a backlog of pending cases. No hearing on his punishment appears in what has been published since. ``` Two pieces of paper did most of the damage, and both carried his own signature. The first was his tax record. His returns and Form 26AS, which he submitted himself to the Disciplinary Directorate, showed sitting fees for most years — but also certification charges from one company for Registrar of Companies filings across three assessment years, and interest on a loan he had made to another (paras 13–14). None of it was concealed. But a Director Simplicitor is meant to draw sitting fees and nothing else, and this record showed more than that. The second was the companies' own filings about themselves. Two of the eight told the Registrar of Companies, over his signature, that they had nobody senior to their directors at all.[^bracket] > "During the year, Mr. Sanjay Gopalal Mundra and [the Respondent] were the Directors of the > Company. There was no appointment or resignation of directors or key managerial personnel during > the year and the company does not have any key managerial person other than present directors." > (para 12) If a company has no manager above its directors, its directors are what runs it. Having signed exactly that declaration for two companies, he could not easily say he was there only to sit in on meetings. ## The charge - **Item (11) of Part I, read with Regulation 190A of the Chartered Accountants Regulations, 1988** — a chartered accountant in practice may not take up any business or occupation outside the profession unless the Council has specifically allowed it. Serving as an ordinary director who draws nothing beyond a sitting fee — a Director Simplicitor — is one of the standing exceptions the Council has already granted; anything more is not.[^simplicitor] The clause does not ask whether the eight companies were well run, or whether anything was taken from them. It asks only how much of their affairs the member actually carried. On that question the Board held him guilty.[^item11] ## What the respondent said Three arguments carried his defence, and each was the kind anyone signing on behalf of a family company would reach for. The signatures, he said, were compliance, not management. Company law requires at least one or two directors to sign a private company's annual accounts and reports, and in several of the eight companies he was one of only two directors on the board — sometimes the only one available, since his father, a co-director in one company, was suffering from Parkinson's disease and could not sign. Filing a form or certifying a resolution to meet a statutory deadline is a "ministerial act" that comes with the seat, he argued, not evidence of running the company (para 5). The money, he said, was professional fee, not director's remuneration. The certification charges came from work his firm did for the company, permitted to a chartered accountant under company law's own carve-out for professional fees paid to a director; the interest was interest on a loan, not pay. Apart from sitting fees, he said, he took nothing from any of the eight companies for being their director (para 5(y)). The complaint, he said, was old and retaliatory. Its allegations ran back to 2004 but were not brought until 2017, and only after he had ruled, as arbitrator, against the complainant's side of a family settlement. He called it "a clear case of counter blast" rather than a genuine grievance (para 5(l)–(m)). ## What the Board held The Board decided the case, as it decides every disciplinary matter, on the balance of probabilities rather than to the criminal standard of beyond reasonable doubt (para 7.4). It rejected the delay argument first: a stale complaint is barred only if the delay has actually stopped the respondent from gathering his own evidence, and he had shown no such difficulty (para 7.2). On the substance, the Board set out what a Director Simplicitor is required to be: > "(a) he is required to attend the Board meetings only.(emphasis provided) (b) He will not be paid > any remuneration except the sitting fees for attending the Board meetings; and (c) He will be > devoting his time for the company only to attend Board meetings and not for any other purpose. > (emphasis provided)" (para 8) Against that standard it weighed twenty-one documents the complainant had produced — directors' reports, financial statements, board resolutions and ROC forms bearing his signature across the eight companies (para 9) — and found he could not show that any financial statement had been signed by him only as an ordinary director alongside someone else acting as managing director; in several companies there was no managing director at all (paras 10–11). It read the two companies' own declarations that they had no key managerial person beyond their directors as further proof that the directors themselves supplied whatever management the companies had (para 12). It read the two companies' Articles of Association, which gave their directors "engagement and dismissal of the staff and of general direction and of management and superintendence of the business of the company," and held that this went "far away from the role of Director Simplicitor" (paras 16–17). And when the Board asked him directly how companies with nobody senior to their directors were run day to day, and who handled their banking, it found he "was unable to provide any justifiable clarifications/explanations" (para 18). It concluded: > "the Board, viewed that it is conclusively proved that the role of the Respondent in the alleged > companies clearly exceeded beyond that of the Director Simplicitor and he ought to have sought the > prior permission of the Council before engaging himself in any business or occupation other than > profession of Chartered Accountant. Accordingly, the Respondent is held Guilty in respect of the > Charge alleged." (para 19) And in its formal conclusion: > "The Board of Discipline, in view of the above, is of the considered view that the Respondent is > Guilty of Professional Misconduct falling within the meaning of Item (11) of Part I of First > Schedule to the Chartered Accountants Act 1949." (para 20)[^coram] ## Where the case stands There is no punishment to report. ICAI's disciplinary process runs in two stages: Findings under Rule 14(9) settle guilt, and a separate hearing under Section 21A(3) fixes what follows it.[^process] This document is the first stage only — it ends at the finding of guilt and the Board's signatures, with no sentence attached, more than two years after the hearing that produced it had closed.[^delay] No punishment order for this case appears on ICAI's Board of Discipline listings for the Council years 2024-25, 2025-26 or 2026-27, as checked on the date given below.[^status] A companion proceeding against his partner, over an overlapping set of directorships and the same clause, is in the same position.[^companion] ## Why it matters *This section is ours, not the Board's.* **A Director Simplicitor's seat comes with a hard limit, and signing past it erases the exemption.** Two companies' own filings declared, over his signature, that nobody senior to their directors existed — which made the directors the management. Sign only what the compliance actually requires, and let someone else sign the rest. **Fee income from a company you also direct can undo the same exemption.** Sitting fees are protected; certification charges from a company whose board you sit on sat in the same tax return and counted against him. Keep a professional engagement and a director's seat with the same company apart, or give up one of them. **A finding of guilt is not the end of the file.** Here it took over two years to be signed and issued, and still carries no punishment. Track a disciplinary case by both dates it can have — when guilt is decided, and when a sentence follows — not by the year printed on its number. This summarises a public order and links the primary source. It is general information, not legal or professional advice. [^parties]: The complainant was Sh. Vikram Singh Chopra, of Kolkata, who was not a chartered accountant. The respondent was *CA. Rajesh Kumar Chandak (M.No. 054637)*, of Kolkata. His partner in the accountancy firm, referred to throughout as "his partner," was *CA. Raj Singh Chopra* — the complainant's brother — who was not himself a party to this proceeding. [^companies]: The eight companies named in the complaint were Hare Krishna Properties Pvt Ltd, Kuldeepak Vanijya Pvt Ltd, Rachit Vanijya Pvt Ltd, High Value Investments Pvt Ltd, High Value Securities Pvt Ltd, Sigma Services Pvt Ltd, Sushwani Info Systems Pvt Ltd and High Value Management & Consultants Pvt Ltd. The order describes some of these as companies of the respondent's own family (his father, wife and, later, son sat alongside him as directors) and others as belonging to his partner's family or to other business associates; it does not give a company-by-company ownership breakdown for all eight. [^bracket]: The order's own quotation of the Director's Report names the respondent directly: "Mr. Rajesh Kumar Chandak." This page substitutes "[the Respondent]" for the name to keep the same anonymisation used throughout; nothing else in the quotation is altered. [^simplicitor]: "Director Simplicitor" is the Institute's own term, drawn from Regulation 190A of the Chartered Accountants Regulations, 1988 and the Council's Code of Ethics, for an ordinary director a member may serve as without seeking specific Council permission — on condition that the member attends board meetings only, draws no pay beyond a sitting fee for attending them, and devotes no other time to the company. [^item11]: Item (11) of Part I of the First Schedule to the Chartered Accountants Act, 1949 makes it professional misconduct for a member in practice to engage in any business or occupation other than the profession of accountancy, except with the Council's specific permission. [^coram]: The Findings were signed by CA. Prasanna Kumar D. (Presiding Officer) and Mrs. Rani Nair (IRS, Retd.), Government Nominee — a two-member Board, which Rule 13(2) of the Chartered Accountants (Procedure of Investigations of Professional and Other Misconduct and Conduct of Cases) Rules, 2007 fixes as a full quorum for the Board of Discipline (para 7.1). [^process]: Rule 14(9) findings settle whether the member is guilty. A separate hearing under Section 21A(3), read with Rule 15, then fixes the punishment — a reprimand, removal from the Register for a limited period, or a fine — once the member has been heard on it. [^delay]: The final hearing in this case was held on 3rd January 2022, and the respondent's last written submissions were considered on 14th January 2022 (paras 2–4). The Findings themselves were signed and dated only on 20th May 2024. The document records why: it was "issued pursuant to the Order dated 29th April 2024 passed by Hon'ble High Court of Delhi in W.P.(C) 5247/2024 namely ICAI Vs R. Vinod Kumar & others" — a separate writ petition concerning a backlog of ICAI disciplinary orders. This page follows the site's usual practice of dating `decidedOn` to the day the Findings were signed, since that is the date ICAI itself treats as the Findings' date, even though the Board had concluded its hearing over two years earlier. [^status]: Checked on 10th September 2026, against ICAI's published Board of Discipline order listings. The Findings are the only document published for this case; no order under Section 21A(3) fixing a punishment for this respondent has been found on those listings for the Council years 2024-25, 2025-26 or 2026-27. This states what has been published, not what punishment, if any, has actually been decided. [^companion]: The complainant separately proceeded against the respondent's partner over an overlapping set of directorships, decided under the same clause on the same day. That matter is recorded under **BOD 597/2021** (file PR-189/2017-DD/248/2017/BOD/597/2021) and is written up as its own page — a separate proceeding against a separate member, not a continuation of this one.