DISCIPLINARY COMMITTEE OF THE ASSOCIATION OF CHARTERED CERTIFIED ACCOUNTANTS

Transcription

1 DISCIPLINARY COMMITTEE OF THE ASSOCIATION OF CHARTERED CERTIFIED ACCOUNTANTS REASONS FOR DECISION In the matter of: Mr Rakesh Maharjan Heard on: Monday, 9 October 2017 Location: ACCA Offices, The Adelphi, 1-11 John Adam Street, London, WC2N 6AU. Committee: Mrs Wendy Yeadon (Chairman), Mr Edward Weiss (Accountant) and Mr Alastair Papps (Lay) Legal adviser: Mr Alastair McFarlane Persons present and capacity: Ms Sarah Cawley-Wilkinson (Case presenter on behalf of ACCA) and Miss Rachael Davies (Hearings Officer) 1. ACCA was represented by Ms Cawley-Wilkinson. Mr Maharjan did not attend and was not represented. The Committee had before it a bundle of papers, numbered pages A-L and 1-81, and a service bundle numbered pages SERVICE/ PROCEEDING IN ABSENCE 2. Having considered the service bundle, the Committee was satisfied that notice of the hearing was served on Mr Maharjan in accordance with the Complaints and Disciplinary Regulations 2014 ( CDR ).

2 3. The Committee next considered whether it was in the interests of justice to proceed in Mr Maharjan s absence. The Committee accepted the advice of the Legal Adviser. The Committee was mindful that Mr Maharjan had a right to attend the hearing and to participate and that the discretion to proceed in his absence must be exercised with the utmost care and caution. 4. The Committee noted that ACCA s notice, dated 6 September 2017 to Mr Maharjan s registered address in Nepal, offered him the opportunity of attending via video or telephone link, with the costs being met by ACCA. Mr Maharjan responded to the notice of hearing with an dated 7 September In this , he accepted his guilt and confirmed that he was jobless and suffering serious family and financial problems. He confirmed that he was in no position to attend the hearing or find a solicitor for court proceedings. ACCA further explained his option to apply for an adjournment, but Mr Maharjan confirmed in an , dated 8 September 2017, that he consented for the hearing to take place in his absence. The Committee was satisfied that in these circumstances Mr Maharjan had voluntarily waived his right to attend. On the information before it and bearing in mind its duty to ensure the expeditious conduct of its business and the wider public interest, the Committee was satisfied that it was in the interests of justice to proceed in the absence of Mr Maharjan. PRELIMINARY APPLICATIONS 5. Ms Cawley-Wilkinson made two preliminary applications. Firstly, she sought to make certain amendments to the Allegations, under Regulation 10(5), which she contended were for the purpose of clarification. She sought to add any or all of the following before medical certificates and to substitute obtain a refund or credit of exam fees for postpone an ACCA exam in Allegation 1(a). 6. Secondly, Ms Cawley-Wilkinson sought to adduce further clarification evidence from the Hospital Aunder Regulation 10(2), contending that it was necessary in the public interest and that there was no prejudice to Mr Maharjan as his admissions indicated that he accepted that both medical certificates were false. 7. The Committee noted that Mr Maharjan had only been notified about these

3 applications by this morning and there had been no response from him. 8. The Committee determined to reject ACCA s amendment application. It did not consider that such amendments were necessary to add clarity to the Allegation. 9. The Committee accepted ACCA s second application to receive pages in evidence, despite the lateness of its receipt, because it was satisfied that there was no prejudice to Mr Maharjan in the Committee receiving it, as he accepted that both certificates were false. ALLEGATIONS Allegation 1(a) Rakesh Maharjan, an ACCA student, submitted medical certificates to the ACCA, in order to postpone an ACCA exam, when these medical certificates were incorrect, on or around the following dates: (i) 8 March 2016 and 22 March 2016 (ii) 13 September 2016 Allegation 1(b) Mr Maharjan's conduct in respect of 1 (a) was: i) Dishonest ii) Contrary to the Fundamental Principle of Integrity Allegation 1(c) By reason of Rakesh Maharjan s conduct in respect of 1(a) and/or 1(b) above, Rakesh Maharjan is guilty of misconduct pursuant to bye- law 8(a)(i). BACKGROUND 10. Mr Maharjan has been a student of ACCA since September 2011.

4 11. On 29 January 2016 Mr Maharjan was sent an ACCA exam entry acknowledgement informing him that he had entered the P3 exam which was to take place on 10 March Mr Maharjan did not sit this exam. 12. On 21 March 2016 Mr Maharjan contacted ACCA and informed them that he had not sat the P3 exam because he was sick and attached a medical certificate and sought transfer of his P3 examination fee to the June 2016 session. This request was granted. 13. The medical certificate was from the Hospital A and dated 9 March It stated that Mr Maharjan had been admitted to the hospital [redacted] on 4 March 2016 and was discharged on 9 March 2016 and recommended complete bed rest for at least seven days. It was signed by a Dr A. 14. On 28 July 2016 Mr Maharjan was sent an ACCA exam entry acknowledgement informing him that he had entered the P7 exam which was to take place on 5 September Mr Maharjan did not sit this exam. 15. On 13 September 2016 Mr Maharjan contacted ACCA and informed them that he had not sat the P7 exam due to sickness and attached a medical certificate and sought transfer of his P7 examination fee to the December 2016 session. 16. The medical certificate was from the Hospital A dated 9 September It stated that Mr Maharjan had been admitted to the hospital [redacted] on 4 September 2016 and was discharged on 9 September 2016 and recommended complete bed rest for at least seven days. It was signed by Dr A. 17. Save for the dates, the two medical certificates were identical and an investigation was commenced by ACCA as to whether they were genuine. Mr Maharjan was written to by ACCA for his full response. On 2 December 2016 Mr Maharjan stated in an to ACCA that he was "shocked to know my medical report was deemed fraudulent". 18. However, in an dated 11 January 2017 to ACCA, Mr Maharjan stated:

5 "I apologise for not responding to your previous mail. I feel guilty for providing fake details about my health report and disreputing the norms and values of ACCA. It was all because of my poor financial status and the fee transfer would have been great relief for me.i realise I have committed a punishable offence according to ACCA conduct and behaviour. But as a student, an excuse would be a great relief for me. And I hereby assure you that I would not repeat such offence ever again." 19. The documentary evidence relating to the Hospital A including the of 10 March 2017, and a file note of a telephone conversation of 8 October 2017 confirmed that Mr Maharjan was not admitted to the hospital at any time. ACCA S CASE 20. ACCA contended that by submitting false medical certificates, Mr Maharjan s conduct was both dishonest and contrary to the Fundamental Principle of Integrity, which imposes a duty on students and members to be "straightforward and honest." 21. ACCA further submitted that such dishonest behaviour amounted to misconduct under bye-law 8(a)(i). MR MAHARJAN S CASE 22. The Committee noted Mr Maharjan s communication with ACCA, in particular, his of 11 January 2017 and of 7 September In the latter he confirmed: I have already accepted my offences and I am ashamed of my conducts by hurting ACCA s reputation. DECISION ON ALLEGATIONS AND REASONS 23. The Committee accepted the advice of the Legal Adviser. The standard of proof to be applied throughout was the ordinary civil standard of proof, namely the balance of probabilities.

6 24. The Committee heard that there had been no previous findings against Mr Maharjan and accepted that it was relevant to put his good character into the balance in his favour. DECISION ON FACTS 25. The Committee carefully considered documentary evidence it had received, as well as the submissions of Ms Cawley-Wilkinson on behalf of ACCA and noted Mr Maharjan s admissions. 26. The Committee noted the evidence from the Hospital A that Mr Maharjan had never been admitted to the hospital and Mr Maharjan s own admission that he provided fake details about my health report and accepted my offences. Further, it noted that Dr A had left the hospital on 18 April 2016, some months before the second certificate, which purported to have been signed by that doctor. 27. The Committee was satisfied both by Mr Maharjan s admission and by the documentary evidence before it, that both limbs of Allegation 1(a) were proved. 28. Further, the Committee considered that Mr Maharjan s admission extended to both limbs of Allegations 1(b). However, in any event, the Committee had no hesitation in concluding that Mr Maharjan was dishonest in submitting false medical certificates intending to deceive his regulators. His conduct would clearly be considered to be dishonest by the standards of reasonable and honest people. Given Mr Maharjan s expressions of shame and regret at his conduct and acknowledgement of the disrespect it entailed to ACCA, the Committee was further satisfied that Mr Maharjan knew or ought to have known that his conduct was dishonest by those standards. 29. The Committee next asked itself whether the proven facts breached the Fundamental Principle of Integrity, as applicable in This imposed "an obligation on all professional accountants to be straightforward and honest in all professional and business relationships." It also implied "fair

7 dealing and truthfulness". The Committee took note of the decision of Mr Justice Stadlen in The Queen on the Application of Margaret May v The Chartered Institute of Management Accountants, to the effect that a breach of a Fundamental Principle of Integrity, is synonymous with a finding of dishonesty. 30. The Committee concluded that submitting fraudulent medical certificates was not being straightforward and honest and was a clear breach of the Fundamental Principle. 31. The Committee next asked itself whether, having found him to have been dishonest and having breached the Fundamental Principle of Integrity, Mr Maharjan was guilty of misconduct. 32. The Committee had regard to the definition of misconduct in Bye-law 8(c) and the assistance provided by the case law on misconduct. It was satisfied that Mr Maharjan s actions were serious departures from the standards expected by the profession and had brought discredit on him, the Association and the accountancy profession. It was satisfied that dishonestly submitting two fraudulent medical certificates was deplorable conduct and passed the threshold for misconduct. SANCTIONS AND REASONS 33. The Committee noted its powers on sanction were those set out in Regulation 13(3). It had regard to ACCA s Guidance for Disciplinary Sanctions and bore in mind that sanctions are not designed to be punitive and that any sanction must be proportionate. It accepted the advice of the Legal Adviser. 34. The Committee considered that the submission of fraudulent medical reports to his regulator to be very serious. The Committee had specific regard to the public interest and the necessity to declare and uphold proper standards of conduct and behaviour. Trust and honesty are fundamental requirements of any professional. Dishonesty by a student member of the accountancy profession undermines its reputation and public confidence in it.

8 35. The Committee considered the following to be aggravating factors: The behaviour was dishonest It was deliberate behaviour It was repeated on two occasions Mr Maharjan initially denied it 36. The Committee considered the following to be mitigating factors: Mr Maharjan admitted his guilt, shortly after his initial denial and this was before any proof was obtained from the hospital Mr Maharjan is of previous good character with no disciplinary history Mr Maharjan has apologised for his behaviour and expressed considerable remorse He appears to have been under considerable financial hardship which was his explanation for his conduct, as he wanted to save having to pay repeat examination fees He has demonstrated some insight into the damage caused by such dishonest behaviour to the reputation of the profession 37. The Committee considered the sanctions available in ascending order. It noted that the conduct was no longer continuing and that Mr Maharjan had expressed genuine regret and apology. However, the conduct was deliberate and the time period over which it took place was not short. The Committee considered that the conduct involved blatant dishonesty. Given the Committee's view of the seriousness of his conduct, it was satisfied that the sanctions of No Further Action, Admonishment, Reprimand and Severe Reprimand were insufficient to highlight to the profession and the public the gravity of the proven conduct. It was not persuaded that Mr Maharjan s mitigation was so exceptional that it permitted the Committee to conclude that a sanction of Severe Reprimand was sufficient and proportionate.

9 38. The Committee determined that his behaviour was fundamentally incompatible with Mr Maharjan remaining on the student register of ACCA and considered that the only appropriate and proportionate sanction was that he be removed from the student register. However, given the mitigation Mr Maharjan had advanced and all the circumstances, it was not persuaded that it was necessary to impose a further time period beyond the minimum of 12 months, before which he is able to apply for readmission. COSTS AND REASONS 39. ACCA claimed costs of 6,012.28, based on a standard assessment of what work this kind of case involves. The Committee reminded itself that it had discretion whether or not to award costs in accordance with the principles of reasonableness and natural justice. The Committee noted that this was a straightforward case. While the Committee considered that the case was properly brought, it had regard to the relevant factors affecting its discretion in the Guide to Costs Orders. The Committee accepted that Mr Maharjan was out of work in Nepal, that his means were very limited, and that he was in financial difficulty. It was satisfied, in all the circumstances, that his ability to pay any costs was likely to be minimal. The Committee therefore determined, exceptionally, not to make any award for costs in this case. EFFECTIVE DATE OF ORDER 40. This order shall take effect from the date of the expiry of the appeal period unless notice of appeal is given prior to the expiry of that period, in which case it shall become effective (if at all) as described in the Appeal Regulations. The Committee was not persuaded that the ground for imposing an immediate order was made out given the facts of this case and that public protection is not involved. Mrs Wendy Yeadon Chairman 9 October 2017