--- title: A group's finance director faced a decades-old bank fraud complaint. No forged document was ever placed on record. description: A group's former finance executive faced a disciplinary complaint over a multi-crore bank fraud, years after he had left it. The Board found no personal wrongdoing traced to him and closed the case. case_number: BOD 789/2025 file_number: PR/G/93/2020/DD/220/2020/BOD/789/2025 forum: board-of-discipline institute: icai decided_on: 2026-01-16 outcome: Not guilty clauses: Item (2) of Part IV of the First Schedule order_pdf: https://disc.icai.org/wp-content/uploads/2026/01/42.-BOD-789-2025.pdf published: 2026-09-07 author: Jainam Shah keywords: bod 789 2025, item 2 part iv first schedule, other misconduct, board of discipline not guilty, bank loan fraud, enforcement directorate complaint, money laundering investigation, delay in disciplinary proceedings source: /icai/board-of-discipline/bod-789-2025 --- # A group's finance director faced a decades-old bank fraud complaint. No forged document was ever placed on record. A finance director spent most of his working life with the Shamken Group of Companies, years before fraud allegations engulfed the men who ran it. Nearly two decades after he finally left, an officer from the agency investigating that fraud complained about him to the accountancy regulator.[^parties] ## What happened ```timeline A finance professional joins a manufacturing and trading group at the start of its growth, rises to run its corporate finance function, and answers directly to the group's managing director. Federal investigators open a criminal enquiry into the group's promoters and directors, alleging a scheme built on forged bank certificates and fabricated project reports used to draw down loans that were then diverted instead of spent as sanctioned. A parallel money-laundering investigation follows the same trail, tracing crores of rupees through company accounts and provisionally attaching group assets. Long afterward, an officer from that investigation complains to the accountancy regulator about the finance executive. The regulator's screening authority forms an opinion of guilt against him. He replies that he left the group's employment many years before the complaint was filed, that none of his own property has ever been attached as proceeds of crime, and that no forged document has ever been traced to his own hand. A Board hears the matter and finds nothing in the record connecting the executive personally to the fraud, as against the promoters who ran the group. It closes the case, holding that the long, unexplained delay between his departure and the complaint counts against the charge. ``` Two things carried the decision: what could be shown to be his personally, and how long the regulator took to look. Nothing in the file tied any of the forged paper to him by name. Investigators had traced Rs 96.38 crore in provisionally attached group assets and a charge-sheet naming the group's promoters and directors — but no forged certificate, invoice or project report was shown to have been prepared, signed or fabricated by him (para 15). The gap in time was the other half of the case. He had severed all ties with the group in October 2003. No allegation reached him for close to fifteen years after that, and the screening authority did not even form a prima facie opinion against him until December 2024 (para 14, para 16). ## The charge **Item (2) of Part IV** of the First Schedule covers what the Act calls "other misconduct" — conduct, whether or not connected with professional practice, that renders a member unfit to practise as a chartered accountant.[^item] It is the clause the Institute reaches for when the alleged conduct does not fit any of the more specific items in Parts I to III, and here it stood in for a criminal conspiracy allegation that had nothing to do with any audit or certificate he himself had issued. The charge was that he had personally conspired with the group's promoters and directors to defraud its bankers — not that he had certified anything false in his own professional capacity. The Board found the charge not made out and held him not guilty. ## What the respondent said He denied the findings outright, calling them false, baseless and built on assumption rather than evidence. The prima facie opinion, he said, was drawn entirely from allegations the Enforcement Directorate had made in a parallel money-laundering complaint that was itself still pending before a special court — and the officer who filed the disciplinary complaint was one of that same agency's investigators (para 9–10). He pointed to what the investigation had not found: no property of his, movable or immovable, had ever been identified, attached or seized as proceeds of crime, despite years of scrutiny. He had resigned from the group in 2003, and the criminal offences relied upon were added as scheduled offences under the money-laundering law only in March 2009 — years after the transactions in question, in 2001–02. He also relied on the complainant's own audit report, which he said confirmed no suspicious transactions and no financial link to him after 2003 (para 10–12). ## What the Board held The Board did not decide the pending criminal cases, and said so. It confined itself to what the disciplinary record showed, and what it showed was a salaried executive with no shareholding or promoter-level control in the group, operating during a period when large loans were admittedly taken and diverted by others (para 13). On the missing evidence, it held: > the Complainant has not placed on record any forged document alleged to have been prepared, > signed, or fabricated by the Respondent himself (para 15) And on the delay: > such prolonged delay, in the absence of compelling justification and clear evidence, militates > against sustaining a finding of professional misconduct, particularly when the issues involved > are intertwined with complex criminal proceedings pending before judicial forums (para 16) ## The order > Accordingly, the Respondent is held Not Guilty of the alleged misconduct. No punishment stage follows a not-guilty finding. The Board ordered the case closed under Rule 15(2) and disposed of it.[^rule] It had taken three hearings across five months to conclude, and the findings were signed five weeks later.[^coram] ## Why it matters *This section is ours, not the Board's.* **A senior title inside a fraud is not evidence of personal wrongdoing.** Being Director (Corporate Finance) made him a natural target, but the Board looked for a document or an asset tied to him individually — not his job description. If your role puts you inside a company under investigation, keep a record of which decisions were actually yours. **Delay cuts both ways, and here it cut for the respondent.** Fifteen years of an ordinary professional life with no allegation against him weighed against a complaint filed that late. Don't assume an old employment is buried — but don't assume a stale complaint automatically succeeds either. **A pending criminal case is not itself proof of misconduct.** The Enforcement Directorate's proceedings were unresolved, and the Board declined to treat that as a shortcut to a finding. If you are named in a criminal investigation, the disciplinary record still has to stand on its own. This summarises a public order and links the primary source. It is general information, not legal or professional advice. [^parties]: *Shri Yogeshwar Sharma, Deputy Director, Directorate of Enforcement, New Delhi* was the complainant. *CA. Parvin Juneja (M.No. 082670), New Delhi* was the respondent, a former Director (Corporate Finance) of the Shamken Group of Companies. [^item]: Item (2) of Part IV of the First Schedule covers what the Act calls "other misconduct" — conduct, whether or not connected with professional practice, that renders a member unfit to practise as a chartered accountant or brings disrepute to the profession. [^rule]: Rule 15(2) of the Chartered Accountants (Procedure of Investigations of Professional and Other Misconduct and Conduct of Cases) Rules, 2007 — where the Board finds a member not guilty, it records that finding and orders the complaint closed. There is no punishment hearing. [^coram]: CA. Rajendra Kumar P (Presiding Officer), Ms. Dolly Chakrabarty, IAAS (Retd.) (Government Nominee) and CA. Priti Savla (Member), all present in person. The prima facie opinion was dated 18 December 2024; hearings were held on 13 August 2025 (adjourned) and 27 October 2025 (adjourned) before the matter was heard and concluded on 8 December 2025. The findings were signed on 16 January 2026.