A brother complained that a chartered accountant sat on a dozen company boards without the Institute's permission.

A chartered accountant and his brother had shared a family fortune since their grandfather retired from it. When that fortune ended up contested in arbitration, the brother took something else to the Institute: a decade of directorships and partnerships the chartered accountant had never asked permission for.¹

What happened#

Three things did the damage that a sequence of events cannot carry on its own.

The first was a set of tax certificates. He told the Board he had never been paid beyond the sitting fees an ordinary director draws for attending board meetings. His own tax records told a different story: from assessment year 2009-10 to 2017-18, several of the companies and both partnership firms paid him sums on which tax had been deducted at source under the sections that apply to professional fees and interest, not sitting fees (para 9.4).

The second was the companies' own paperwork. Six of them shared near-identical Articles of Association, and those articles gave their directors as a body — a body he belonged to — the power to hire and dismiss staff, manage the business day to day, borrow money, invest surplus funds and buy or sell company property (para 9.5). A nominal director's role is to turn up to board meetings; these articles described someone with the run of the company.

The third was a permission he did eventually get, and when he got it. In September 2018 the Council allowed him to act as a sleeping partner in one of the two firms. But the conduct in question ran from 2009 to 2017, and the complaint itself had already been filed in June 2017 — a year before he applied for a permission that, once granted, could not reach back to cover it (para 11).

The charge#

• Item (11) of Part I — a chartered accountant in practice engaging in any business or occupation other than accountancy, without the Council's specific permission.² The rule does not bar a member from sitting on a company's board at all: an ordinary director who attends meetings only, and draws no more than the sitting fee for doing so, needs no permission whatever.³ What needs the Council's permission is anything beyond that.

The complaint, as the findings record it, had described something more as well: that the chartered accountant stayed in partnership with a fellow chartered accountant who, sitting as an arbitrator in the family's own dispute, had learned of these business interests and said nothing to the Institute about it (para 2).⁴ That characterisation never became a separate charge. The Institute's screening authority found a case to answer only on the directorships and partnerships, and the Board's finding of guilt is confined to that one allegation (para 2).

What the respondent said#

His central defence was that the law already has a name for what he was: a Director Simplicitor, an ordinary director who attends board meetings and nothing more. He pointed to Council guidance recognising exactly that status, and to a Delhi High Court judgment holding that a chartered accountant is not barred from being a director of a company at all — only from being a director of a company he also audits, which was never alleged here. Signing financial statements and annual forms, he said, was not management but a "ministerial act" that comes with the position of director under the Companies Act, whoever fills it, and none of the eleven companies had paid him more than a sitting fee for attending their meetings (para 5).

On the two partnership firms, his case was that he never chose the role at all. He was brought into both on the retirement of his grandfather, when the grandfather's share was divided three ways — a small share to his father, and the rest evenly between himself and his brother, the complainant — under a partnership deed dividing the retiring grandfather's stake among the family.⁵ What the partnership deed called his salary, he said, was really a distribution of family profit, not payment for work, and a clause naming him for it had been inserted by mistake and later corrected. Both firms had been dormant for years by the time of the complaint.

He argued, further, that the complaint was itself a product of the family dispute rather than any professional failing — that his brother and father controlled the family's personal records and bank accounts, that he had been kept off at least one account from which money later went missing, and that a complaint filed seven years after the fact by someone who was never his client, over conduct dating back further still, should not have been entertained at all. He also raised, after the final hearing had already concluded, that an earlier sitting of the Board had three members present against two at the last.

What the Board held#

It dismissed the procedural point first: a two-member Board is a full quorum under the Board's own procedural rules, nothing about its composition had changed between hearings, and raising the point only after the hearing closed looked like an attempt to shift attention from the merits (para 7.1). It dismissed the delay argument next, because the respondent had never shown that the passage of time had actually made his defence harder to put forward (para 7.2), and dismissed the objection to who had complained, because the Director (Discipline)'s power to investigate does not depend on the complainant's standing (para 7.3). On the standard of proof, it held that disciplinary proceedings ask only whether misconduct is more likely than not, not whether it is proved beyond reasonable doubt (para 7.4).

On the substance, the Board set the paperwork against the money. The companies' financial statements for several of them recorded no director's salary at all for the years in question — on their face, consistent with his account. But his own tax records showed payments reaching him from most of the same companies and both firms across nine assessment years, with tax deducted at source (para 9.4-9.5). And where he said the label "director" carried no real power, the companies' Articles of Association said otherwise: the same clauses that made every one of their directors responsible for hiring staff, borrowing money and running the business day to day applied to him as much as to anyone else on those boards (para 9.6). On the partnership firms, both deeds let every partner operate the firm's bank account and required every partner to devote time to its day-to-day affairs — and he had signed both firms' financial statements and tax returns as a partner in his own right, not as a family member drawing an inheritance (para 9.7).

The Council-permission point was the one his own evidence undid. He had, in fact, asked the Council for permission — for one of the two firms, in an email that drew a response in September 2018. But the Board noted that his own complaint history ran from 2009 to 2017, and that even the complaint against him had been filed a year before he sought that permission. A permission obtained afterward could not retrofit what came before it (para 11):

Upon perusal of same, the Board observed that the involvement of the Respondent in managerial day to day functions of the alleged 13 companies/ firms is not permitted by the Council as such and prior approval of the Council of the Institute is prerequisite before engaging into other occupation. Thus, the Respondent is conclusively held liable for said violation. (para 11)

It also declined to treat the family dispute as a defence to the charge itself. That the complaint grew out of a fight over the family's money was, in the Board's view, a reason for the complaint to exist, not a reason to excuse the conduct it described (para 12). It concluded:

Considering the attendant circumstances, the evidence put forth during the proceedings and the submissions on record, 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 13)

And in 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 14)

Where the case stands#

The document ends here, at that finding and the signatures of the two members who heard the case.⁶ There is no order fixing what he is to bear for it.

That is not a gap in the record — it is how the process works in two steps. A Rule 14(9) Findings order, like this one, settles only guilt. What follows for the member — a reprimand, a fine, removal from the Register — is decided separately, at a later hearing held under Section 21A(3), after the member has had a chance to be heard specifically on punishment. These Findings were themselves issued more than two years after the final hearing, once a High Court order directed the Institute to clear a backlog of pending cases that included this one.⁷ As of 10 September 2026, no order fixing punishment in this case appears anywhere in the Board of Discipline's published listings.⁸

Why it matters#

This section is ours, not the Board's.

Money that moves under deduction of tax is evidence, whatever the paperwork calls it. He told the Board he drew nothing beyond sitting fees; his own Form 26AS showed tax deducted from payments reaching him for years. If you are relying on "no remuneration" as part of a permission-free role, check what your own tax records say about you before someone else produces them.

A company's Articles of Association can outrun the title on your visiting card. "Director Simplicitor" describes a role, not a job title — and these articles handed every director hiring, borrowing and management powers regardless of what anyone called themselves. Read the company's own constitution before assuming a label protects you.

Permission sought after a complaint is filed cannot reach back before it. He applied for Council permission for one firm a year after the complaint against him was already on file, for conduct that predated the application by years. Seek the Council's permission before taking the seat, not once someone has asked why you never did.

This summarises a public order and links the primary source. It is general information, not legal or professional advice.