Y is a qualified Company Secretary. Y was in the need of a job since her husband got transferred to a town and for the past 6 months, she had not been able to get any job. At last, through her neighbour's contact, she me
CS Professional · Compliance Management, Audit and Due Diligence · PYQS · December 2024
Y is a qualified Company Secretary. Y was in the need of a job since her husband got transferred to a town and for the past 6 months, she had not been able to get any job. At last, through her neighbour's contact, she met with MG, Director (Finance) of XYZ Limited. She got a job in the secretarial department of XYZ Limited, through the recommendation of MG, the Director (Finance). It was decided mutually that if she gets the job in the company, she would part 50% of first-year salary with MG, Director (Finance), comprising of 50% in cash and remaining through banking channel and same would be paid within 3 months of joining the company. Accordingly, she paid the pre-decided amount to MG Director (Finance). Citing the relevant Code of Conduct of the Institute of Company Secretaries of India, explain whether Y has been guilty of violating the Code.
Answer & Explanation:
Part II of First Schedule to the Company Secretaries Act, 1980 deals with Professional misconduct in relation to members of the Institute in service. Part II of the First Schedule recognizes the need for a member in employment also to observe a certain code of Conduct. It specifies certain instances of misconduct to which a Company Secretary in employment may stand attracted. Clause (1) of Part II of the First Schedule provides that a member of the Institute (other than member in practice) shall be deemed to be guilty of professional misconduct, if he, being an employee of any company, firm or person "Pays or allows or agrees to pay; directly or indirectly, to any person any share in the emoluments of the employment undertaken by him." Case Analysis: In this case, Y has paid her salary to the MG, Director (Finance) by whose influence XYZ Ltd. selected her and give the job in the company. This act of Y is not correct, since she has violated the Professional Code of Conduct of ICSI. A member in employment shall not share emoluments of the employment with any other person, not even a member. Both direct and indirect sharing of the emoluments is prohibited. Conclusion: Hence, Y should not involve in these activities to get the job. She has committed professional misconduct and has violated the Code of Conduct of ICSI.
Topics: Professional Ethics
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