The National Company Law Tribunal (NCLT), Bengaluru Bench, has prohibited a city-based chartered accountant (CA) from being appointed as a statutory auditory of any company for a period of five years for “committing fraud along with the company by not reporting the discrepancies and fraudulent transactions of the company”.
Ramaiah Nataraja, Proprietor of M/s. Nataraja & Co. Chartered Accountants, Bengaluru, has also has failed to inquire about the fraudulent functioning the company, M/s Super Royal Holiday India Private Limited, which is against the prudent business practice under Section 143 (Powers and duties of auditors and auditing standards) of the Companies Act, 2013, said the NCLT.
A bench comprising K. Biswal (member-judicial) and Manoj Kumar Subey (member-technical), passed the order while disposing of a petition filed by the Ministry of Corporate Affairs for baring the CA for five years.
The MCA had initiated an investigation into the affairs of the Super Royal Holiday after it was found that it indulged in the deposit and withdrawal of huge sums through bank accounts post-demonetisation.
Multiple investigations
The multiple investigations had disclosed that the company, in the garb of conducting tour packages, was collecting deposits from its nearly two lakh customers in the name of membership fees and was not spending any amount from this amount for providing any tour services, for which the customers had to pay separately.
The investigations have revealed that the CA had colluded with the company by allowing them to perpetuate the fraudulent activities.
While the MCA had already initiated process of liquidation of the company as per the law, it had sought action against the CA under Section 140(5) of the Act as he had failed to discharge his duties being a statutory auditor of the company.
