--- title: A firm's founder made three long-serving staff partners. All three registered a rival firm without resigning. description: A founder gave his long-serving staff the run of his practice. Three of them registered a competing firm while still inside it, and clients followed. All three were reprimanded. case_number: BOD 832/2025 file_number: PR/41/2023/DD/174/2023/BOD/832/2025 forum: board-of-discipline institute: icai decided_on: 2026-01-31 punished_on: 2026-06-19 outcome: Reprimand clauses: Item (6) of Part I of the First Schedule; Item (8) of Part I of the First Schedule order_pdf: https://disc.icai.org/wp-content/uploads/2026/07/BOD-832-2025.pdf published: 2026-08-29 (updated 2026-08-29) author: Jainam Shah keywords: bod 832 2025, bod 818 2025, bod 817 2025, solicitation of professional work, item 6 part i first schedule, item 8 part i first schedule, no objection certificate audit, outgoing auditor communication, board of discipline reprimand source: /icai/board-of-discipline/bod-832-2025 --- # A firm's founder made three long-serving staff partners. All three registered a rival firm without resigning. A Dehradun chartered accountant spent thirty years building his firm, and he built it out of his own people.[^status] Then three of them registered a firm of their own, and his clients began moving to it.[^parties] ## What happened ```timeline A Dehradun chartered accountant builds his practice over thirty years. The articles who trained under him stay on as employees and are eventually made partners. Between them they come to run the critical operations of the firm — the bank accounts, the cheque book, the hiring, and the client relationships. Three of those partners register a competing firm of their own, named after one of them. They do not resign to do it, and for the next seven months they are partners of both firms at the same time. A letter reaches one of the founder's long-standing clients, telling it about the new firm and asking it to appoint the new firm. Audits begin transferring across, each on a no-objection certificate signed, on behalf of the firm being left, by one of the three men leaving it. Only afterwards do they give up the old partnership. The founder finds his accounts in disorder, orders a special audit and takes five allegations to ICAI — solicitation, audits taken without communication, false representations to clients, ₹55 lakh he says was siphoned out of the firm, and tampering with its income-tax e-filing portal. The Director (Discipline) allows two of the five through and drops the other three. One Board hears the three partners together, on identical facts, and finds both surviving allegations proved against each of them. Their punishments are assessed separately, months later, under three case numbers. All three are reprimanded on the same day. ``` Two moments in that sequence decided the case. The first was a letter. Two clients — a cooperative sugar federation and its provident fund trust — later wrote about a letter they had received. It told them about the new firm and asked them to appoint it. Neither side ever produced that letter. All the Board had was the clients writing about it. The second was a set of papers that looked entirely in order. Each time an audit moved across, the new firm asked the old firm for a no-objection certificate, exactly as it should have.[^noc] Each one came back signed — signed, for the firm being left behind, by one of the three partners who was leaving it (para 23). Nine clients feature in the findings — two in the first matter, seven in the second. The complaint had named more.[^clients] ## The two clauses Both sit in the First Schedule to the Chartered Accountants Act, 1949, which is why the Board of Discipline heard the case rather than the Disciplinary Committee.[^forum] - **Item (6) of Part I** — soliciting professional work. Not only advertising: any approach, direct or indirect, that amounts to asking a client for the engagement.[^item6] - **Item (8) of Part I** — taking on an audit that another chartered accountant already holds, without writing to them first. The writing is the whole duty. It exists so that an auditor cannot be replaced without ever hearing of it.[^item8] Neither clause concerns the quality of the audit. Both concern how work changes hands. The Board found all three partners guilty under both and reprimanded each of them. The rest of the complaint never got that far. The ₹55 lakh the founder said had been taken from the firm, the tampering with its income-tax e-filing portal, a resignation letter he said had been forged, a meeting held in his office while he was away to persuade his staff to leave — all of it was dropped at the screening stage, before anybody argued it (para 8). ## What the partners said They answered both charges, and on the same lines as each other. On the letter, their case was that nobody had read it before calling it solicitation. When it was finally placed before the Board, it turned out to be a reply: the client had written first, asking what had happened to the firm, and the letter answered the question. It stated a fact and asked for nothing. The clients had also said so themselves, in writing — that they were not solicited, and had shifted because they chose to. The only pressure on anyone, they argued, came from the founder's own legal notice to those clients (para 18). On the certificates, they argued there had been no real change of auditor to write about. The same chartered accountant had done this audit work before the new firm existed and continued afterwards. A certificate had been taken in any case. To call it worthless merely because a shared partner signed it was guesswork, particularly as the founder had no involvement in these audits (para 19). ## What the Board held On the first charge, the Board never needed to see the letter. Two clients with no stake in the quarrel had written about receiving it, and that was enough to treat it as having existed and to know roughly what it asked for. From there the burden of proof changed hands: it was no longer for the founder to prove the letter had solicited work, but for the new firm to produce the correspondence and show that it had not. The firm did not produce it (para 22), and the Board held: > the Respondent(s), being partners of the Respondent Firm during the relevant period, cannot be > exonerated and are held Guilty of Professional Misconduct under Item (6) of Part I of the First > Schedule (para 22) Note who that catches. What made each of them guilty was being a partner of the firm that gained, not writing the letter. Nobody ever established who wrote it. On the second charge, the Board's objection was never that the certificates were missing, but that the wrong person had signed them: > such acknowledgment of NOC by a common partner, who was simultaneously a beneficiary of the > transfer of professional work to the Respondent Firm, cannot be treated as an independent and > bona fide compliance of the requirement of prior communication (para 24) It then set out what Item (8) is for — keeping the change in the open, and preventing an auditor from being displaced unfairly — and held that seeking a certificate and granting it within the same group of people who stood to gain "defeats the very spirit and purpose of the provision" (para 25). That the firm returned for fresh certificates in later years, for some of the same clients, told against it further (para 24). ## The order > the Board decided to REPRIMAND him. A reprimand is the lightest punishment the Board can impose.[^reprimand] No suspension, no fine. One Board decided guilt for all three partners in a single set of findings, recorded under three separate case numbers.[^files] A differently constituted Board assessed each punishment months later, hearing every partner in person on the same day and reprimanding each of them.[^coram] By then the complaint had been with the Institute for close to three years.[^timeline] ## Why it matters *This section is ours, not the Board's.* **You can be held guilty over a letter nobody can produce.** The clients mentioned it in their own correspondence, and that alone was enough for the Board to accept that it existed. The firm was then the one required to produce it and show it had been harmless — and could not. So keep a copy of what your firm sends out. The day a client refers to a letter of yours, you are the one who will be asked to produce it, and being unable to is what decided this charge. **A no-objection certificate is only as good as the person who signs it.** These were on file, on letterhead, properly signed, and they still failed. So if you are a partner in both the firm giving up the work and the firm taking it on, do not sign the certificate yourself. It has to come from someone at the outgoing firm with nothing to gain from the transfer. **A client confirming they were not solicited does not end the matter.** These clients put it in writing that nobody had approached them and that they had moved to the new firm of their own accord. The Board found solicitation anyway, because Item (6) asks whether the member made an approach — not whether the client minded, or how the client described it later. **The gravest allegations are usually not the ones decided.** ₹55 lakh and the tampering with the e-filing portal were both in this complaint. Neither reached a hearing. Recovering money is for a civil court and tampering is for the police; a disciplinary Board is neither. What remained were two questions of professional etiquette, and a reprimand. **A partner answers for what the firm sends, not only for what he sends.** Nothing here turned on what any one of them personally wrote or signed — nobody ever established who wrote the letter. Each was a partner in the firm that gained, in the months that mattered, and that was enough to convict all three. Joining a firm means taking on responsibility for its outgoing correspondence, including letters you never saw. This summarises a public order and links the primary source. It is general information, not legal or professional advice. [^parties]: *CA. Anurag Sangal (M.No. 071539), Anurag Sangal & Co. (FRN 00467C)* was the complainant. The three respondents were *CA. Nanak Narang (M.No. 416419)*, *CA. Vimal Kishore (M.No. 077942)* and *CA. Kavita Ohri (M.No. 048316)*, partners of *M/s Vimal Kishore & Associates LLP (FRN C400317)* — the firm named after the second of them, and the one who acknowledged the no-objection certificates on behalf of the complainant firm. All of Dehradun. [^files]: One incident, one set of findings, three case numbers — because punishment under Section 21A(3) is assessed member by member. The Board heard the three files together, by consent, since the facts were identical (para 15). This page follows the findings and cites **BOD 832/2025** (file PR/41/2023/DD/174/2023), the file listed first in them. The other two are **BOD 818/2025** (file PR/38/2023/DD/101/2023, clubbed with PR/39/2023) and **BOD 817/2025** (file PR/40/2023/DD/173/2023). The findings are reproduced in full in each of the three PDFs, so the linked order carries the reasoning for all three. [^status]: The order describes the respondents' standing inconsistently. Para 2 records that two of them joined as employees or articles and were later "inducted as partners based on long-standing professional association and trust", while the third "had been employed with the Complainant Firm since 2007". Para 20 then treats it as "an admitted position" that the respondents were partners of the complainant firm from 1 April 2000 until 1 April 2022. Both statements are in the same document and the Board did not reconcile them. Nothing on this page turns on which is right: the finding rests on partnership in the NEW firm, which is undisputed and dated 30 August 2021. The findings use "Respondent(s)" throughout, because they were written about all three at once. [^noc]: A no-objection certificate is the outgoing auditor's written confirmation that they have no objection to the incoming auditor taking the assignment. It is the ordinary way Item (8)'s communication requirement is met in practice — but the clause requires communication with the retiring auditor, so a certificate that never reached an independent mind at the outgoing firm does not satisfy it, however complete the paperwork looks. [^item6]: Item (6) of Part I of the First Schedule concerns a member in practice soliciting professional work, whether directly or indirectly, by circular, advertisement, personal communication or interview. [^item8]: Item (8) of Part I of the First Schedule requires a chartered accountant to communicate with the retiring auditor, in writing, before accepting a position as auditor previously held by another member. [^clients]: The solicitation finding concerned Uttarakhand Sahakari Chini Sangh Ltd. and its Employees' Provident Fund Trust. The communication finding concerned Welham Boys' School Society, JJ Buildtech, JJ Realtech Pvt. Ltd., Anand Swaroop Gupta, Gupta Food Products, Mussoorie Public School and Raj Lumba (para 26). The original complaint had listed five clients on the solicitation allegation and eleven on the communication allegation; the Board's guilty findings covered fewer than either list, and made no finding on the rest. [^timeline]: Prima facie opinions dated 8 May 2025, 3 June 2025 and 23 June 2025 across the three files. Final hearing 28 October 2025; judgment pronounced 8 December 2025; findings signed 31 January 2026. Each respondent was heard on the punishment in person on 19 June 2026, the day all three reprimands were passed. [^coram]: The findings were signed by CA. Rajendra Kumar P (Presiding Officer), Ms. Dolly Chakrabarty (Government Nominee) and CA. Priti Savla (Member). Punishment, under Section 21A(3) read with Rule 15(1), was passed by a Board of CA. Babu Abraham Kallivayalil (Presiding Officer), Ms. Dolly Chakrabarty and CA. Pankaj Shah. [^forum]: First Schedule matters go to the Board of Discipline; Second Schedule matters, and matters falling under both, go to the Disciplinary Committee. The two carry very different punishment ceilings. [^reprimand]: Section 21A(3) gives the Board a graduated set of punishments, of which a reprimand is the lowest, ahead of removal of the name from the Register for a limited period and a fine. Check the current sub-section before relying on any figure — the amounts have been amended.