DISCIPLINARY COMMITTEE OF THE ASSOCIATION OF
CHARTERED CERTIFIED ACCOUNTANTS
REASONS FOR DECISION
In the matter of:
Mr Dayong Ding
Heard on:
Friday 2 October 2015
Location:
The Chartered Institute of Arbitrators, 12 Bloomsbury
Square, London, WC1A 2LP
Committee:
Mr John Crawley (Chairman - Lay), Mr Patrick Bragg
(Accountant), Mrs Suzanne McCarthy (Lay)
Legal Adviser:
Mr Robin Havard
Persons present
and capacity:
Martin Khoshdel (Case Presenter on behalf of ACCA)
and Richard Lorkin (Committee Officer); Mr Ding
(Member) appeared in person.
Observers:
None
ALLEGATION(S)/BRIEF BACKGROUND
1.
Allegation 1
(a)
Pursuant to bye-law 8(a)(i) Mr Ding is guilty of misconduct in that on
or around 4 July 2014 he made changes to the registered office
address of Company A, which he knew were incorrect, without the
knowledge or consent of the directors.
(b)
Mr Ding’s conduct as set out in allegation 1(a) above was:
(i)
Dishonest;
(ii)
Contrary to the fundamental principle of Integrity (as
applicable in 2014).
2.
Mr Ding is the sole director and shareholder in C.H.D Management (UK)
Limited. C.H.D Management provides business/tax advice and accounting
services throughout the UK and China where its clients have entered or
have the intention to enter UK markets.
3.
Mr Ding received a visit from Trading Standards on 28 July 2014 following
complaints they had received regarding Company A, a company whose
registered office was the same as that of C.H.D Management (UK) Limited.
4.
During the visit from Trading Standards it became apparent that Mr Ding
had taken it upon himself to amend the registered office address of
Company A to a random address in Bridgend which he had selected
randomly and without the knowledge or consent of the Director of Company
A.
5.
Following advice from Trading Standards, Mr Ding took steps to re-amend
the registered office address back to the original address.
6.
The Trading Standards Officer then brought this matter to ACCA’s attention
and an investigation into Mr Ding’s conduct commenced.
DECISION ON FACTS/ALLEGATIONS AND REASONS
Allegation 1(a)
7.
This was admitted by Mr Ding and, by reason of that admission, the
Committee found the allegation proved.
8.
On 28 July 2014, Person B, a Trading Standards Officer, visited Mr Ding at
his firm’s offices at Chase Business Centre, 39-41 Chase Side, Southgate,
London N14 5BP regarding complaints made against Company A which
shared the same registered office address.
9.
During that visit, Mr Ding had confirmed that, in association with agents,
Company B, he had formed Company A and that he was aware of the
complaints against Company A. However, he claimed that he had nothing to
do with the running of Company A’s business.
He confirmed that his
company had set up over 100 similar companies based in China and Hong
Kong and that the companies had been given his permission to use his
firm’s address as their registered office address.
10.
Mr Ding admitted, and the Committee found, that as a result of the
complaints against Company A, he had re-registered the company’s
registered office address to Address X. He admitted that he had no prior
knowledge of that address which he randomly picked, nor did he have
permission from anyone to use the address.
11.
Companies House records confirmed that the change of registered address
took place on 4 July 2014. Indeed, Mr Ding admitted that he had filed the
document entitled “Change of Registered Office Address” (page 10).
12.
Person B provided ACCA with a copy of her handwritten investigation report
dated 28 July 2014 which had been signed by Mr Ding during the visit with
Trading Standards. It confirmed that Mr Ding had made the changes to the
registered office address and that he did not know if the new address was
genuine. In the report, Mr Ding confirmed that he knew the address change
had been a “misleading admission”.
13.
Person B provided a copy of the statement she had taken from Mr Ding
during the visit which he had signed and had informed Mr Ding that it was
an offence to submit a document to Companies House which he knew was
false.
14.
On 11 December 2014, ACCA wrote to Mr Ding asking for his comments
and for his confirmation that he accepted the outline of events set out in
Person B’s report.
15.
In his letter dated 17 December 2014, Mr Ding confirmed that he had been
instructed by Company B to form Company A but that, approximately one
month after its formation, he began to receive calls, letters and visits from
unhappy customers of Company A and this was causing disruption to his
own business.
16.
He found out that Company A had placed the registered address as its
correspondence address on its website and the unhappy customers
continued to contact his office in an attempt to obtain a refund for the goods
they had purchased from Company A.
17.
Mr Ding admitted, and the Committee found, that he changed the registered
office address of Company A to a random address in South Wales. In his
letter of 17 December 2014, he stated 'I had no choice, because of too
much suffering led to my normal business / then picked up an address at
random and changed the company's registered address to Address X on
04/04/2014'.(sic)
18.
In addition, Mr Ding admitted, and the Committee found, that, without any
authorised consent, either from the director of Company A or the owners of
the address in Bridgend, he made the change to the registered office
address of Company A on 4 July 2014.
19.
Companies House confirmed that the authentication code is sent to a
company's registered office address when a company is set up and opts
into online filing when a company is formed.
20.
Mr Ding also admitted that he was still in possession of the online
authentication code used originally in order to access webfiling with
Companies House for Company A when he set up the company.
21.
Mr Ding received a letter from Trading Standards dated 5 August 2014
which informed him that he must remove the misleading information from
Companies House by 13 August 2014 or they would consider enforcement
action.
22.
On or around 7 August 2014, Mr Ding took the necessary steps to restore
the registered office address of Company A back to the Chase Business
Centre address as illustrated by the document entitled “Change of
Registered Office Address” (page 11) some nine days after the original
instruction from Trading Standards.
23.
As stated, Mr Ding admitted this allegation and, therefore, the Committee
found it proved. In changing the registered address of Company A without
the director being aware of, let alone authorising this change, would mislead
customers of Company A who may wish to contact the company. Members
of the public are entitled to assume that information contained at Companies
House is reliable and accurate. The Committee was satisfied that such a
deliberate act amounted to misconduct on the part of Mr Ding in that it
brought discredit to Mr Ding, ACCA and the accountancy profession.
Allegation 1(b)(i)
24.
The Committee referred to and relied on its findings of fact at paragraphs 7
to 23 above. The Committee had also listened very carefully to Mr Ding’s
account and his explanation that, when he decided to change the address,
he was angry and wanted “…to get rid of the hassle” and did not think too
deeply of the effects of his actions on members of the public.
25.
For the following reasons, the Committee was satisfied that, by the
standards of reasonable and honest people, Mr Ding had acted dishonestly.
The Committee also concluded that Mr Ding knew that, by those standards,
he had acted dishonestly.
26.
Mr Ding had become angry at his business being disrupted by disgruntled
customers of Company A contacting him and coming to his office seeking a
remedy for defective goods supplied by Company A. He then discovered
that the business address and telephone number on Company A’s website
was that of his own firm.
27.
Whilst Mr Ding gave evidence that he attempted to make contact with the
director of Company A on several occasions in order to resolve the matter,
when that proved unsuccessful, he followed a deliberate course of conduct
which involved measures designed to mislead members of the public.
28.
Mr Ding deliberately went on to Google to find a random address in South
Wales, without any attempt to check the address or seek the authority of
either the director of Company A or the owners of Address X. He then
completed and submitted a Companies House form, which comprises of
part of a public record. In filing this document without authority, Mr Ding
knew that it contained false information, intended to mislead. In this way, he
hoped to achieve his desired aim to “….get rid of the hassle”.
29.
For these reasons, the Committee found allegation 1(b)(i) proved.
Allegation 1(b)(ii)
30.
The Committee referred to and relied upon its findings of fact as outlined
above.
31.
For the same reasons as outlined in paragraphs 24-28, the Committee
found that Mr Ding had acted contrary to the Fundamental Principle of
Integrity.
32.
Consequently, the Committee found allegation 1(b)(ii) proved.
SANCTIONS AND REASONS
33.
The Committee carefully considered what sanction, if any, to impose taking
into account all it had read in the bundle of documents, ACCA’s Guidance
for Disciplinary Sanctions (2013) and the principle of proportionality. It had
listened to legal advice from the Legal Adviser which it accepted.
34.
There were no previous findings against Mr Ding. The Committee had also
taken into account the two testimonials provided by Mr Ding which
commented on the problems he experienced and the courteous and
appropriate manner in which he dealt with the complainants who attended
his office. They also testified to his good character generally as an honest
person. To that extent, the Committee found that Mr Ding’s dishonest
conduct was out of character.
35.
The Committee also acknowledged that Mr Ding had admitted one of the
allegations and had expressed his remorse for what he had done.
36.
The Committee was satisfied that Mr Ding had attempted to resolve in an
appropriate way what was for him a matter which was out of the ordinary
before embarking on the course of conduct which gave rise to the
proceedings. It also noted that the conduct did not relate directly to his
practice as an accountant. He had remediated his misconduct reasonably
promptly when advised by Trading Standards.
37.
This was an isolated incident of misconduct. Mr Ding had provided a
comprehensive and honest account of what he had done when initially
requested for an explanation by ACCA. He had engaged in the process
throughout including his attendance at the hearing, expressing remorse, and
the Committee was satisfied that there was a growing recognition by him
and thereby insight into the seriousness of his conduct. He had shown due
respect to the Committee and the proceedings generally.
38.
The Committee considered the available sanctions in increasing order of
severity having decided that it was not appropriate to conclude the case with
no order.
39.
The Committee was mindful of the fact that its role was not to be punitive
and that the purpose of any sanction was to protect members of the public,
maintain public confidence in the profession and in ACCA and to declare
and uphold proper standards of conduct and performance.
40.
The Committee concluded that an admonishment would not reflect the
seriousness of the Committee’s findings. Mr Ding’s conduct had the
potential of causing direct prejudice and inconvenience to members of the
public. Furthermore, the Committee had found Mr Ding to have acted
dishonestly which is always a particularly serious finding in relation to a
member of ACCA.
41.
For similar reasons, a reprimand was also considered inappropriate.
42.
In the circumstances, the Committee concluded that the sanction which was
appropriate, proportionate and sufficient was to impose a severe reprimand.
Although there had been a finding of dishonesty, there were sufficient
mitigating features as outlined above to conclude that this was the
appropriate sanction necessary in this case.
COSTS AND REASONS
43.
The Committee concluded that ACCA should be awarded costs against Mr
Ding. The case had been properly brought and the allegations had been
either admitted or proved. The amount of costs for which ACCA applied
was £3,476.00.
No detailed breakdown had been provided and
consequently Mr Ding was not in a position to make representations in
respect of the amount claimed.
Taking that into account, the full and
detailed information provided by Mr Ding at the outset, and the financial
circumstances provided by Mr Ding, in exercising its discretion, the
Committee awarded costs to ACCA of £1,800.00.
EFFECTIVE DATE OF ORDER
44.
The Committee decided that the order shall take effect from the date of the
expiry of the appeal period referred to in the appeal regulations.
PUBLICITY
45.
ACCA’s regulations require ACCA to publish the Committee’s findings and
orders by way of a news release naming the relevant person as soon as
practicable. The Committee has discretion as to which publications and
news release should be sent and discretion in exceptional circumstances to
direct that the relevant person is not named. There were no exceptional
circumstances in this case. The Committee ordered that a news release be
issued to ACCA’s website and to the local press in both referring to Mr Ding
by his full name.
Mr John Crawley
Chairman
2 October 2015