HOW THE ACCA TRIED TO SILENCE AUSTIN MITCHELL MP
THE ACCA TACTICS FOR SILENCING ITS OWN MEMBER - PREM SIKKA
 

The Association of Chartered Certified Accountants (ACCA) is the second largest UK based accountancy body. The ACCA’s royal charter (dated 25 November 1994) lists that one of its objects is “to promote and facilitate the dissemination and exchange of information on matters of professional interests among members and others .....” (clause 3f). In the mid-1990s, it claimed to have 47,000 members (reaching 60,000 in 1998) and 120,000 registered students in more than 100 countries (Certified Accountant, September 1996, page 1).  Following the Insolvency Act 1986 and the Companies Act 1989, it acts as a designated regulator for insolvency and external auditing. Its entire Council is directly elected by its members, but does not owe a ‘duty of care’ to ACCA members or any member of the public affected by its policies. It is relevant to note that in contrast to the secrecy afforded to ballots for local, regional, national and trade union elections, the names and addresses of ACCA members are printed on ballot papers. Until 1994, the ballot papers for Council elections were required to be returned to the ACCA Chief Executive rather than to an independent scrutineer . Currently, and in marked contrast to the norms of political elections in liberal democracies, the ACCA ballot papers are not numbered and election candidates have no right to observe the count or demand any recount. Furthermore, under its bye laws, the Association operates a system of ‘delegated proxy voting’, a system prohibited for election of trade union officials. The specimen form produced in the Rulebook (for example, see ACCA 1995, page 82) does not contain any provisions for pre-printing the name of the President on the proxy forms. In practice, however, all proxy forms carry the name of the President, effectively inviting members to give their proxies to the President. The voting members can delete the President's name and delegate their proxies to another person of their choice, but most rarely nominate someone else. The President is not obliged to indicate the candidates who might have benefited from his ‘block’ vote. The ‘delegated voting system’ has enabled the leadership to cast up to 20% of all the votes and facilitates considerable centralization of power (Robins, 1997). In the words of a former ACCA Council member, its “[election system produces a] self perpetuating oligarchy ....... a small section determines the outcome”, and that “ACCA does not hold elections; it simply makes appointments” (Accountancy Age, 15 May 1997, page 4; Accountancy, June 1997, page 13).

Unlike other professional bodies, such as the Law Society, the ACCA officeholders (e.g. President, Deputy President, vice-president) were not (and are still not) directly elected by ordinary members. Neither the general public nor ordinary ACCA members are permitted to attend and observe any Council meeting and have access to the minutes of Council meetings or any agenda papers. Many of the UK Council members had connections with various businesses, educational establishments (both in the public and the private sector) trading with the ACCA. Such links could create the impression of ‘conflict of interests’, but the ACCA did not keep a publicly available register of  ‘Council members’ interests ’.

Unlike the other UK-based accountancy bodies, the ACCA is particularly strong in former British colonies (e.g. Nigeria, Malaysia, Singapore, Hong Kong). Around 50% of its membership are located outside the UK, But until 1996, the ACCA Council remained entirely UK based.  No non-UK member has ever held high office. Of the UK membership, around 50% are estimated to be non-white. Even so, the ACCA did not operate any system of  ‘ethnic monitoring’ of students or members  to enable it to develop any broader policies for combating any racial discrimination faced by its students and/or members.

Against the above background, a campaign to democratise  the Association was launched. It took the form of (unsuccessful) attempts to get reformers elected to ACCA Council (Accountancy Age, 14 October 1993, p. 3; The Times, 16 May 1996; The Accountant, June 1996, p. 2.), questions at annual general meetings (The Accountant, November 1996, p. 4; The Accountant, May 1997, p. 11, Accountancy Age, 15 May 1997, p. 4; Accountancy, June 1997, p. 13), questions in Parliament (Hansard, 11 January 1994), series of press articles (Sikka, 1994, 1995a, 1995, 1995c, 1996; Mitchell, 1996, Robins, 1997), speeches (PASS, November 1993, p. 4; The Accountant, November 1993, p. 5; PASS, January 1994, p. 1 and 4), letters to Privy Council (Accountancy Age, 15 January 1998, p. 1), the Department of Trade and Industry and other regulators (The Accountant, September 1996, p. 3), three  Early Day Motions  (EDMs) in the House of Commons  (Accountancy Age, 9 December 1993, p. 3)  and two extraordinary general meetings (Financial Times, 28 June 1995; Accountancy, August 1995, p. 14; The Accountant, October 1995, p. 9; Accountancy, October 1996, p. 12; PASS, October 1996, p. 12; The Accountant, November 1996, p. 5).

The ACCA officials responded to the debate in  variety of ways. For example,  they sought to exert pressure upon Sikka  and his employers with a public statement that “if there was institutional endorsement of Mr. Sikka’s views, the association may have considered cancelling its long-standing accreditation of its courses at the university” (Financial Times, 9 December 1993, p. 14). Such a threat had considerable purchase because Sikka’s university ran internally examined ACCA courses . The Association also sought to mobilise negative press publicity by selectively leaking the results of the Council elections in advance of the annual general meeting and informing journalists that Sikka had not been successful . Other tactics included premature closure of general meetings  (Accountancy, June 1996, p. 19) and on other occasions the leadership simply ignored the questions asked  (PASS, June 19968, p. 6) and moved to the next item on the agenda.

The Association also sought to mobilise opinion through the use of its in-house magazine, Certified Accountant, received by all its members. The UK based members may have become aware of the debates about ACCA’s governance through various newspapers and magazines, but the same newspapers and magazines are not easily accessible to non-UK members. In this context, the  official magazine acts as a significant source of information for non-UK members and has considerable capacity for stimulating and/or thwarting debates, dialogue and questions about the governance of the Association. In January 1993, Sikka was invited by the editor to write an ‘opinion’ article for Certified Accountant. In response to the invitation, an article critical of the status-quo was submitted, but the editor refused to publish it on the ground that “it read like a manifesto” (letter dated 12th February 1993) which might give unfair advantage to Sikka who was standing as a candidate for Council elections . This objection might have carried some authority if the Certified Accountant had consistently excluded material that supported the status quo as well as that challenged it. However, as the subsequent events were to make it clear, this was far from the case .

Sikka organised two extraordinary general meetings which were held in September 1995 and October 1996. The EGMs considered issues such as direct elections of President, Vice-President, end to the delegated proxy voting system, open council meetings, greater transparency and accountability. Following precedence, the ACCA officials were obliged to mail a short statement written by Sikka (and other reformers) to all ACCA members. In the period immediately preceding each meeting, the officials made considerable use of the in-house magazine (Certified Accountant) to oppose Sikka’s proposals and mobilise members to vote against the motions. However, Sikka was not permitted  to have any statement, article, letter or words in the official magazine.

Prior to the 31st October 1996 extraordinary general meeting, the ACCA leadership used the in-house magazine to dissuade members from supporting the call  for an EGM. The magazine was also used to launch a series of personalised attacks upon Sikka. The ACCA President advised members that the organisers of the EGM were using “incorrect information”, “unsubstantiated allegations”, “unprofessional language” (Langard, 1996). The subsequent articles and letters selected for publication by the ACCA officials went on to argue that Sikka should “retract [his views] with some expression of regret, or to resign” and urged members to “question the genuineness of the man [Sikka] and validity of what he  writes (Certified Accountant, August 1996, p. 15-16). Subsequent attacks questioned “why he [Sikka] chose to join it [ACCA] in the first place” (Certified Accountant, September 1996, p. 15). The leadership’s campaign ran for three consecutive months (July, August and September 1996) and prompted Sikka to seek a ‘right of reply’. Towards this end, letters were sent to the ACCA President (letters dated 19 July 1996 and 16 August 1996) and the editor of its in-house magazine (letter to the editor of Certified Accountant, 19 July 1996), but such a right was not secured  (letter from ACCA President, 24 July 1996). Sikka (and some of his supporters) sent letters to the magazine, but none of these were published. On 28 August 1996, Austin Mitchell sent a letter, but it was not published either. However, in this case, the editor of Certified Accountant wrote “I note the points you make, which have raised before and well-aired, but do not consider your letter appropriate for publication ” (letter dated 9th September 1996).

Despite the campaign by the leadership, the necessary signatures for the EGM were secured though all the motions put forward by reformers were defeated (Certified Accountant, December 1996, p. 1, 3 and 11).  The attention of the press was galvanised by some comments made by the ACCA Vice-President during the proceedings of the EGM on 31sr December 1996. Speaking (and flanked by President, Deputy President and chief Executive) from the official platform, the ACCA Vice-President described Sikka as “anti-Semitic ”, “racist ”, “sexist ”, “thief ” and a “WANKER ” (The Independent, 6 November 1996, p. 22; Financial Times, 11 November 1996, p. 21; Daily Telegraph, 23 November 1996; Accountancy Age, 7 November 1996, p. 1 and 44; 14 November 1996, p.11; 28 November 1996, p. 1; Accountancy, December 1996, p. 12; PASS, December 1996, p. 10-11; Accountancy Age, 27 February 1997, p. 3; The Times, 6 March 1997, p. 32).

Within the above context, an article by Austin Mitchell was published in Accountancy Age on 12 September 1996 (Mitchell, 1996). It became the centre of a dispute and enabled the ACCA to threaten legal action. The Mitchell article attacked the ACCA for silencing reformers and poor public accountability. It also stated that “the ACCA gave its publishing contract to a firm in which the 1995/96 president had a commercial interest. This wasn’t made public during his term ” (Mitchell, 199, p. 14). The information in the article was based upon previous correspondence between Austin Mitchell and ACCA Chief Executive (letters from Austin Mitchell dated 26 September 1995 and 16 October 1995; letters from ACCA Chief Executive, dated 9 October 1995 and 19 October 1995). This correspondence was released to the press  and generated a front-page news item in Accountancy Age  (Accountancy Age, 19 October 1995, page 1) and was also repeated by Sikka (1996), alongside which there appeared a commentary from the ACCA Chief Executive. In the commentary the ACCA Chief Executive  made no observations on the former President’s business interests.

For nearly a year after the original news item (i.e. the item appearing on 19th October 1995), there was no correspondence from the ACCA, its former ACCA President, or any lawyer alleging that anything contained in the articles was defamatory or incorrect. However, soon after the publication of the Mitchell (1996) article, which appeared at a time when Sikka was being targeted by the ACCA officials in the run-up to the EGM (see above), the ACCA Chief Executive wrote to the editor of Accountancy Age. In this letter, she alleged that the Mitchell article contained defamatory information in relation to the business interests of the former President. The letter demanded a public apology and added,

“I suggest that you need to take very great care indeed about future material which you publish over the names of Messrs Sikka and Mitchell and their various supporters . Please let me have your undertakings that you will not again publish this or any similar allegations” (letter from ACCA Chief Executive to the editor of Accountancy Age, dated 20 September 1996).

In response, the editor of Accountancy Age reminded the ACCA Chief Executive of the origins of the information (i.e. her correspondence with Austin Mitchell) and that no objections had been received to the previous publications of that information (see above for details). The editor went on to add. “I must decline your request for undertakings not to publish ‘this or similar allegations’ “ (letter dated 1st October 1996). There was no further correspondence between Accountancy Age (backed by the economic resources of an international publisher) and ACCA. No correspondence of any kind was received from the former ACCA President, his lawyer or the ACCA lawyers.

Austin Mitchell did not receive any correspondence from the former ACCA President, or his lawyers. However,  on 24th September 1996, twelve days after the Mitchell (1996) article, ACCA lawyers Messrs Morgan Bruce (a London-based law firm) wrote to Austin Mitchell. They alleged that that the information published in relation to the business connections of the former President was defamatory and stated, “We act for the Chartered Association of Certified Accountants” ...... no doubt [you would] wish to withdraw this seriously defamatory allegation in an agreed statement to be published in Accountancy Age in a permanent position, and to undertake that you will not repeat this or any similar defamatory statement. ...... We await to hear from you or solicitors on your behalf forthwith and certainly within next 7 days”. A further letter (18 October 1996) demanded the above commitment “within the next three days”. Despite further letters  no apology or undertaking of any kind was given and the Mitchell article was not withdrawn.  With the passing of the EGM, no further correspondence has been received from ACCA or its lawyers.