CODE OF CONDUCT 15 TH NATIONAL CONFERENCE OF

CODE OF CONDUCT 15 TH NATIONAL CONFERENCE OF COMPANY SECRETARIES 27 TH JUNE 2014 MUMBAI BY MAHESH ANANT ATHAVALE KANJ & ASSOCIATES PUNE

OVERVIEW � The Company Secretaries Act, 1980: Chapter V – Section 21 to 22 E First Schedule Second Schedule � The Company Secretaries (Procedure of Investigations of Professional and Other Misconduct and Conduct of Cases) Rules, 2007

MISCONDUCT

AUTHORITIES DISCIPLINARY DIRECTORATE BOARD OF DISCIPLINE DISCIPLINARY COMMITTEE

DISCIPLINARY DIRECTORATE �Council has constituted Disciplinary Directorate (DD). �Complaint would be first received by DD then he will form a prima facie opinion. �Depending on the Schedule which covers the Misconduct, DD further places the matter before Board of Discipline or Disciplinary Committee.

Misconduct Schedule II Board of Discipline Disciplinary Committee

WITHDRAWAL The Complaint can be withdrawn subject to the permission of BOD or DC

21 A. BOARD OF DISCIPLINE

CONSTITUTION � Council of ICSI constitutes BOD: Presiding Officer : Expert in disciplinary matters and profession 2 Members : 1 Elected Council member 1 Officer of the Institute � DD functions as Secretary to the BOD

�Summary procedure adopted by BOD for disposal of matters �If found guilty, an Opportunity of being heard given to the member before making any order.

PUNISHMENT �Reprimand �Removal from the Register of members upto 3 months �Fine upto Rs. 1 Lakh

�If DD is of the view that there is no prima facie case in the complaint, he will inform accordingly to the board. �If Board Agrees - File closed Disagrees - DD shall further investigate

21 B. DISCIPLINARY COMMITTEE

CONSTITUTION Council constitutes DC consisting of: � President or VP of Council as Presiding Officer � 2 Council members � 2 Eminent persons nominated by Central Government

Present Disciplinary Committee �Presiding �Members officer- Mr. R. Sridharan - Mr. Sanjay Grover Mr. Sudhir Babu C Mr. S. Balasubramaniam Mr. S. K. Tuteja

�Council may constitute more Disciplinary Committees �DC free to prescribe own procedure �Before making any order, Opportunity of being heard given to the Member.

PUNISHMENT �Reprimand �Removal from the Register of Members (Even Permanently) �Fine upto Rs. 5 Lakhs

POWERS OF CIVIL COURT Certain powers of civil court can be exercised by DD: �Summoning & Enforcing attendance �Examining on oath �Discovery & Production Documents �Receiving evidence on Affidavit of

�Person ceasing to be a member of ICSI is subject to code of conduct if alleged misconduct is during the period of his membership. �Misconduct well as could be professional as other misconduct, which includes any act of Omission or Commission which travells beyond Schedule I or Schedule II

APPELLATE AUTHORITY �Appellate Authority for CA and CS is same. �Provisions of Chartered Accountant Act, 1949 in respect of appellate relevant. authority are also

Section 22 E provides for appeal to authority: � Any member aggrieved by order of BOD/DC may within 90 days from communication of order to him, prefer an appeal � DD (subject to authority from the Council) may also file an appeal against decision of BOD/ DC � Delay beyond 90 days can be condoned by Appellate Authority

�Appellate Authority may Confirm Modify Set Aside Order/ Penalty OR Remit the case back to BOD/ DC �Opportunity of being heard given to the concerned parties

�There is no provision for filing appeal by the complainant if he is a NON MEMBER In such a scenario writ is the only option �Members of DC/ BOD/DD are deemed to be public servants within

FIRST SCHEDULE

PART I- Misconduct in relation to PCS �Allowing a non-member to practice in one’s name �Sharing fees with a non member �Accepting profits of a Professional work of a person, who is a non-member �Entering member into Partnership with a non-

�Securing Professional assignment through a person unless he is an employee or a partner �Soliciting clients or professional work directly or indirectly. ---Applying/ Requesting/ Inviting/ Securing work from other PCS permitted ---Replying to tenders or enquiries permitted.

�Advertising his attainment or services or using designation other than CS ---Displaying degree of University or membership of other professional bodies, if approved by Council, is permitted. ---Limited advertisement subject to guidelines issue by Council permitted

� Accepting position of PCS without communicating with earlier incumbent in writing. � Charging fees as a percentage of profit or contingent on finding of result of the assignment. � Engaging in any business/ occupation other than profession of PCS ---Directorship in other companies is permitted � Allowing a non partner to sign on one’s behalf any certificate to be given as PCS.

PART II- Misconduct in relation to members in service �Sharing of Emoluments with any other person �Accepting fees or profits from lawyers, CS, brokers, agents or customers by way of Commission or Gratification

PART III- Misconduct in respect of all Members �Describing oneself as fellow without being FCS. �Not supplying information called by Council/ Committee of the Council/ DD/ BOD/ DC/ QRB or Appellate Authority �Giving false information for procuring assignment.

PART IV- Other Misconduct �If held guilty by any court for an offence punishable with imprisonment for a term upto 6 months �Bringing disrepute to the profession or the institute due to his action whether related to otherwise. Professional work or

SECOND SCHEDULE

PART I- Misconduct in relation to PCS �Disclosing confidential information of client to others �Issuing certificate or report without examining the facts by himself or by his partner or employee or other PCS �Vouching accuracy of forecast or

�Expressing opinion in respect of an enterprise in which he/ his partner has substantial interest �Suppressing material fact in report or certificate �Failing �Not to report material misstatement exercising due diligence or being negligent in Professional duties

�Failing to obtain sufficient information before reporting or certifying. �Failing to bring out material departure from acceptable procedure relating to Secretarial practice. �Not keeping advances received from client for expenses in separate bank account.

PART II- General Misconduct � Contravening provisions of CS Act, 1980 or regulations or guidelines issued by the Council. � Disclosing confidential information of a employee to others � Including false information to Institute, Council, Committee of Council, DD, BOD, DC, QRB or Appellate authority. � Embezzling money received in Professional capacity

PART III- Others If held guilty by the court for an offence punishable with an imprisonment for a term exceeding six months.

The Company Secretaries (Procedure of Investigations of Professional and Other Misconduct and Conduct of Cases) Rules, 2007

SUMMARY OF RULES �Complaint is to filed in Form I in triplicate before DD �If complainant is a company, Board Resolution is necessary �Prescribed fee (non-refundable) of Rs. 2500/- to be paid �Fee to be paid by Demand Draft in favour of ICSI

�Unique reference number given by DD if complaint found to be in order �A fresh complaint may be clubbed with the previous complaint on the same matter against the same member �Complainant has right to rectify the defects in complaint & resubmit the same. Such rectification to be done within given time

�Council suo has authority to take action moto on receipt of any information about misconduct. �Any anonymous information received by DD is not to be entertained. �Within 60 days of receipt of complaint a copy of complaint has to be forwarded to PCS or Member

�Written statement to be filed within 21 days by the defendant �Rejoinder to be filed within 21 days by the Complainant. �Every communication from DD/ BOD/DC has to be done by RPAD

�In case addressee refuses to receive it is deemed to have been served on addressee �Under rule 12 complaint has to be filed within 7 years from alleged misconduct �Principle followed of natural justice required to be

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