of the Disciplinary Tribunal (Member Guilty of Misconduct in a Professional Capacity, Conduct Unbecoming an Accountant, Negligence or Incompetence and Breaching the Code of Ethics
of the Institute of Chartered Accountants of
New Zealand)
At a hearing of the Disciplinary Tribunal of the Institute of Chartered Accountants of New Zealand held on the 19th day of May 2004, which the member elected not to attend and was not represented by counsel, the tribunal recorded that Grant Perry McGowan, of Christchurch, pleaded guilty to the following charges and admitted the following particulars:
"Charges
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 is guilty of:
? misconduct in a professional capacity;
? conduct unbecoming an accountant;
? negligence or incompetence in a professional capacity of such a degree or so frequent that it brings the profession into disrepute;
? breaching the code of ethics of the institute.
Particulars
IN THAT
In his role as a chartered accountant in public practice and in relation to complaints made against him, he:
(a) made investments on behalf of a client in entities in which he had a material financial interest without offering the client the opportunity to take independent advice and/or without appropriate authorisation;
(b) made inappropriate and/or imprudent investments on behalf of the client;
(c) failed to keep proper records in relation to monies invested on behalf of the client and/or monies invested;
(d) borrowed approximately $85,000.00 from the client's trust to repay monies owed in circumstances where he did not have the appropriate authority to do so;
(e) made investments on behalf of a client in entities in which he had a material financial interest without offering the client the opportunity to take independent advice and/or without appropriate authorisation;
(f) made inappropriate and/or imprudent investments on behalf of the client;
(g) failed to keep proper records in relation to monies invested on behalf of the client and/or monies invested;
(h) failed within a reasonable and proper time to repay monies to the client's estate, despite repeated requests to do so by the executor to the estate;
(i) failed to properly account for residual monies and/or interest owed to the client's estate;
(j) failed to fully repay residual monies and/or interest owed to the client's estate;
(k) in circumstances where he had been ordered to appear before the professional conduct committee for a final determination and in circumstances where he suffered an injury prior to that meeting, he failed within a reasonable or proper time to give any explanation or excuse for his non-attendance and/or failed to notify the professional conduct committee until approximately
1¢ hours before the professional conduct committee meeting on the 12th day of January 2004."
The tribunal found the member guilty as charged and the particulars proven.
Orders of the Tribunal
(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 Grant Perry McGowan be removed from the institute's Register.
(b) Pursuant to Rule 21.31 (d) of the Rules of the Institute of Chartered Accountants of New Zealand, the disciplinary tribunal ordered that the certificate of public practice held by Grant Perry McGowan be cancelled.
(c) Pursuant to Rule 21.33 of the Rules of the Institute of Chartered Accountants of New Zealand, the disciplinary tribunal ordered that Grant Perry McGowan pay to the institute the sum of $41,738.00 (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.
(d) Pursuant to Rule 21.52 (b) of the Rules of the Institute of Chartered Accountants of New Zealand, the disciplinary tribunal ordered that the publication of
the names of the complainants, the solicitors and the names of the companies involved, other than the name of the member's practice and the member's practice trust company, be prohibited.
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 Chartered Accountants Journal of New Zealand, the
New Zealand Gazette and the Christchurch Press with mention of the member's name and locality.
In reaching its decision, the tribunal considered that it had three principle matters it had to consider in connection with the charges.
(1) The charges to which Grant Perry McGowan has pleaded guilty include misconduct in a professional capacity, conduct unbecoming an accountant, negligence or incompetence and significant breaches of the code of ethics;
(2) Grant Perry McGowan failed to respond to the professional conduct committee on numerous occasions which seriously impedes the institute's conduct processes; and
(3) there was a prior charge against Grant Perry McGowan, a consent order of a severe reprimand and the payment of costs of $3,500.00 for a complaint of a significantly similar nature.
The tribunal agreed with the prosecution that the charges to which the member had pleaded guilty were serious, that the member was guilty of totally unprofessional conduct and that his actions related to vulnerable clients.
He had put clients' money in high risk investments and in investments in which he himself had a financial interest.
There had been a pattern of offending and Grant Perry McGowan had treated the professional conduct committee with disdain.
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 24th day of May 2004.
A. N. FRANKHAM, Tribunal Chairman.