Admitting that its accounts appear to be have been “falsified”, Ricoh India said its promoters, including the NRG Group, will infuse fresh funds to cover the unaudited estimated loss of ₹1,123 crore for the fiscal ended March 31, 2016.
In a statement to stock exchanges, the Indian arm of the Japanese imaging and electronics major, said it appears that its accounting principles and standards have been violated. “Such acts of omission and commission have caused a grave loss to the company and its shareholders,” it added.
Ricoh India said the disclosure follows an internal investigation it carried out to ascertain its financial position and the probable actions of a few company officials. The investigation was commissioned after the preliminary findings of audit firm PriceWaterhouseCoopers indicated that Ricoh India’s financial statements for April 1 to September 30, 2015, “did not reflect a true and fair view of the state of affairs of the company.”
One of the promoters of the company had also filed a plea with the National Company Law Tribunal (NCLT), seeking action against the company and certain company officials.
Ricoh India has notified the Bombay Stock Exchange that the proposed recapitalisation does not place any liability on minority shareholders, nor change the current shareholding of the two entities in Ricoh India.
“The present regrettable situation at Ricoh India is an isolated incident in the history of Ricoh Group. The petition from the promoters to NCLT for recapitalising Ricoh India will give a significant impetus to our efforts to effect a correction of the present situation and provide funds for business operations and future business growth.
“The recapitalisation will also offer relief for minority shareholders. We look forward to the NCLT permitting the promoters to fund the company, pursuant to the petition, as it is vital to our future,” said Ricoh India MD and CEO, AT Rajan.
Sources said certain promoter entities as well as existing and earlier top management personnel at the firm are already the subject of ongoing regulatory probes.
Earlier, under pressure from minority shareholders, Ricoh India had said it will hold an EGM on August 5 to discuss the removal of four directors and the appointment of a director.
In April, the company’s India MD and CEO, Manoj Kumar, had resigned from the board after being asked to go on leave amid an audit.
SEBI expands probeMarket regulator SEBI has expanded its probe into the goings on at Ricoh India. The company has been under SEBI’s scanner for some time and the regulator will now also look at possible fund diversions. The suspected misdoings at Ricoh India are likely to be the biggest corporate fraud in India after the Satyam scandal came to light in 2009.