The Institute of Chartered Accountants of India (
ICAI) has suspended the membership of Harsh Vardhan Lodha, chairman of
Birla Corporation, and his brother Aditya Vikram Lodha for three months.
In a letter, Vandana D Nagpal, director (discipline), said the decision
of the council was taken "upon a
consideration of the joint written
representation, dated July 24, received from respondents Aditya and
Harsh, and also the oral submissions by them before it".
"The council ordered the names be removed with respect to allegations
falling in the meaning of clause (I) of Part III of the first schedule
of Chartered Accountants Act, 1949. The said punishment would run
independent of the recommendations made earlier to the high court for
misconduct under second schedule to the Chartered Accountants Act,
1049," the order said.
A joint complaint was made against the Lodhas in 2005 under section 21 of the Act. Incidentally,
Aditya Lodha is a part of a Chartered Accountant (CA) firm Lodha & Company, while
Harsh Lodha is the chairman of M P Birla Group company, Birla Corporation.
When contacted, MP Birla Group said in an email,"We are surprised to see
the unsigned note being circulated by O P Agarwal and K P Khandelwal
with regard to the ICAI's findings against our clients. The note is
incorrect and an apparent attempt at distorting the findings of the
council. It should have been mentioned the complainants had filed 15
charges of alleged misconduct against the Lodhas, of which they have
been acquitted by the ICAI itself in the majority and found not guilty.
Of the small number of charges remaining, we have confidence once the
facts are appreciated, our clients will be absolved. There has been no
finding that suggests there was any mistake in the number of partners,
as has been implied in the note and our clients have acted in a
transparent manner. Similar complaints had been filed with other
regulatory authorities, including the Comptroller and Auditor General
and Reserve Bank, a couple of years ago, which had been responded to
satisfactorily by our clients to their satisfaction." Both the Birlas
and Lodhas were entangled in a legal battle over the ownership of M P
Birla Group assets.