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September 29, 2009

Past president questions extent of ICAI presidential powers

A past president of the Institute of Chartered Accountants in India (ICAI) has suggested there should be a rethink of the extensive powers granted to ICAI presidents when they take office.

When presidents are inaugurated for their one-year terms, the ICAI council grants them a raft of powers including responsibility for organising programmes, functions and committee meetings; and the authority to appoint nominees for various international and local committees and boards.

The president also acts as a spokesperson for the institute on all occasions, unlike most professional bodies where individual experts can speak on different topics.

Sunil Talati was ICAI president in 2007. He told The Accountant that, by and large, all ICAI past presidents have exercised the powers delegated by council “very cautiously and in the best interest of the institute”. However, Talati felt there were problems under the current leadership. The Accountant discovered an open letter that Talati wrote to current ICAI president Uttam Prakash Agarwal and forwarded to the ICAI council members. The letter expressed concerns about a number of issues, which Talati said he has been voicing in council meetings over the past six months.

Money matters

Many of Talati’s concerns involve what he considered reckless spending. He was also concerned Agarwal was taking on too much responsibility and exerting too much power.

He noted the ICAI vice-president has traditionally been responsible for handling the institute’s funds and finances, and branch matters, so the president is free to attend to important policy matters. However, Talati said he heard reports that the vice president had been divested of these responsibilities and Agarwal was personally attending to them.

“While appreciating your personal involvement… the message and consequences are not really desirable,” Talati wrote.

Concerns about expenditure included INR2.5 million ($52,000) spent on a cricket match held as part of the institute’s diamond jubilee celebrations. Talati said no council approval was obtained for the event – they were only informed it was taking place. He also noted that when ICAI branches asked to play cricket matches in 2006 and 2007 they were refused on the grounds that it did not fall within the objectives and powers of the Chartered Accountants Act.

Talati was also unhappy with a letter that told regional branches to display a framed photograph of the president and said non-compliance would be “viewed seriously”.

“Although the president is the leader of the profession, he is first among equals and therefore directions issued for putting up photographs… do not send a very positive message to our membership,” he wrote.

Talati also criticised an aspect of Agarwal’s handling of the Satyam fraud. Immediately following a visit to imprisoned Price Waterhouse partner S Gopalakrishnan, Agarwal said publicly that Gopalakrishnan was innocent. Within days, Agarwal made another public announcement saying the PW partner was guilty.

“This does not create a good image of the institute,” Talati said.

The Accountant discovered, from the same source as Talati’s letter, a letter that appeared to be a reply “from and on behalf of” Agarwal. But while Talati confirmed his letter was authentic, the ICAI did not answer questions put to them on the matter.

‘Personal hatred’

The reply said “personal hatred and animosity” were the main causes behind Talati’s letter. It also alleged Talati abused his own presidential and vice-presidential powers, and was involved in excessive spending.

Talati said the allegations against him were untrue and there has been no conflict or difference of strong opinions between himself and Agarwal in the past.

He said most of the 40 council members supported his position and that a sufficient message has now been carried to the president.

Talati said that due to this year’s events, it may be wise for the council in future to grant powers to the president in stages based on performance and experience.

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