and Breaching the Code of Ethics)
At a hearing of the Disciplinary Tribunal of the Institute of Chartered Accountants of New Zealand held on the 23rd day of July 2003, at which the member was present, and a continued hearing on the 31st day of July 2003, which the member attended by teleconference, the tribunal recorded that Philip Roger Young pleaded not guilty to the following charges and denied the following particulars:
THAT in terms of the Institute of Chartered Accountants of New Zealand Act 1996 and the Rules made thereunder, and in particular Rule 21.30:
? the member has been guilty of misconduct in a professional capacity (particulars 1 (a), 1 (b), 1 (c), 1 (d), 1 (e), 1 (f), 1 (g) and 2);
? the member has been guilty of negligence or incompetence in a professional capacity and that this has been of such a degree or so frequent as to reflect on the member's fitness to practise as an accountant and/or tends to bring the profession into disrepute (particulars 1 (a), 1 (b), 1 (c), 1 (d), 1 (e), 1 (f), 1 (g) and 2);
? the member has been guilty of conduct unbecoming an accountant (particulars 3 and 4);
? the member has breached the Code of Ethics of the Institute (EP 53, 54 and FP 2 and 5) (particulars 1, 2, 3 and 4).
IN THAT
? In respect of a complaint by the Chairman of the Practice Review Board:
(a) the member and/or the member's company, Progressive Business Centre Limited, borrowed money from the associated finance entities Omega Finance Limited and/or Omega Group (NZ) Limited;
(b) the member failed to have the financial statements of Omega Finance Limited and/or Omega Group (NZ) Limited audited;
(c) the member allowed Baywater Finance Limited
(an associated finance company) to receive moneys from the public without having issued a current prospectus as required by the Securities Act;
(d) despite a warning that the prospectus in relation
to Baywater Finance Limited had expired on the 31st day of August 2002, the member failed to correct the position;
(e) without a correct prospectus and despite the warning referred to in 1 (d) above, the member continued to receive deposits and roll over current deposits and make loans to customers;
(f) the member operated Baywater Finance Limited in breach of clause 5.4 (b) of the trust deed in that the member failed to operate the business in an efficient, prudent and businesslike manner and/or in breach of the Securities Act;
(g) the member operated the said company in such a manner as to invite a section 30 notice pursuant to the Corporations (Investigation and Management) Act 1989, thus indicating the company was "at risk".
? The member operated a corporate practice without approval (Rule 19).
? In the course of corresponding with the institute
and/or the appeals council, the member has engaged in intemperate and offensive remarks concerning the investigator and members of the professional conduct committee.
? In the course of corresponding with Inland Revenue, the member faxed an offensive statement to a female officer.
The tribunal found all the particulars to be proven, except in relation to (f), where it made no determination on whether the member failed to operate the business in an efficient, prudent and businesslike manner.
The tribunal made its determinations based on submissions and evidence presented by both the professional conduct committee and the member.
Taking into account the cumulative effect of the proven particulars, the tribunal found the member guilty as charged.
Orders of the Tribunal
Following consideration of evidence and submissions for the professional conduct committee and by the member, the tribunal made the following orders:
(a) Pursuant to Rule 21.31 (a) of the Rules of the Institute of Chartered Accountants of New Zealand, the disciplinary tribunal ordered that the name of Philip Roger Young be removed from the institute's Register.
(b) Pursuant to Rule 21.33 of the Rules of the Institute of Chartered Accountants of New Zealand, the disciplinary tribunal ordered that Philip Roger Young pay to the institute the sum of $12,878.00 (inclusive of G.S.T.) in respect of the costs and expenses of the hearing before the disciplinary tribunal and the investigation by the professional conduct committee.
In reaching its decision, the tribunal considered the
wide-ranging nature of the particulars, their seriousness
and the member's unwillingness and/or inability to recognise the failures that the member has been guilty of.
These factors led the tribunal to conclude that it would not be in the interests of the public nor the profession for the member to remain as a member of the institute.
In accordance with Rule 21.35 of the Rules of the Institute of Chartered Accountants of New Zealand, the disciplinary tribunal directed that the decision be published in the
New Zealand Herald, the Waikato Times, the New Zealand Gazette and the Chartered Accountants Journal of
New Zealand with mention of the member's name and locality.
Right of Appeal
Pursuant to Rule 21.41 of the Rules of the Institute of Chartered Accountants of New Zealand, which were in force at the time of the original notice of complaint, the member may, not later than 14 days after the notification of this tribunal to the member of the exercise of its powers, appeal in writing to the appeals council of the institute against the decision.
No decision other than the direction as to publicity shall take effect while the member remains entitled to appeal or while any such appeal by the member awaits determination by the appeals council.
Dated this 31st day of July 2003.
A. N. FRANKHAM, Tribunal Chairman.