 "Ricoh India admits accounting violations, falsification of books")
Ricoh India, a subsidiary of Japanese imaging and electronics firm Ricoh, has admitted that some of its companies violated accounting principles and are responsible for falsification in the books of accounts.
“Ricoh has been carrying out an internal investigation for ascertaining the true and fair accounts of the company for the quarter ended December 31, 2015 and FY16. The acts of omission and commission have caused a grave loss to the company and its shareholder,” Ricoh India, whose shares have been suspended from trading, informed stock exchanges on Tuesday.
The company has reported a significant loss of Rs 1,123 crore (unaudited estimated) for the financial year ended March 31.
Ricoh India said that once the company was able to prepare its financial results for the quarter ending December 31, 2015, and the financial year ended March 31, 2016, it would be in a position to ascertain the exact amount of loss suffered for FY16.
The internal investigation by Ricoh was based on a PwC report, which noted: “Going by the investigation, it appears that the accounts have been falsified and the company’s accounting principles and standards have been violated.”
PwC, which was appointed by the company’s audit committee for forensic view of accounts, indicated “wrongdoing” and unsupported transaction in the books.
Promoter Ricoh has agreed to infuse funds in the company to the extent of loss suffered due to the irregularities. “In order to provide new funds, the existing shares of the promoters in Ricoh India would be cancelled without reduction in capital and simultaneously capitalised to the extent of its cancelled capital with premium to the extent of the losses suffer,” said A T Rajan, managing director and chief executive of Ricoh India.
The recapitalisation does not place any liability on minority shareholders, nor does it change the current shareholding of the two entities in Ricoh India, he added.
Corporate governance experts have welcomed the move. “It is good that they are restoring their financials, but doing so it should ensure that minority shareholders would be benefited. Besides, the law will take its own course of action by punishing the fraudster but it cannot reduce the loss of the minority shareholders,” said J N Gupta, founder and managing director of SES, a proxy advisory firm.
The BSE had suspended trading in the company's shares with effect from May 26, as the firm has failed to submit its limited review reports to the regulator for two consecutive quarters - September and December 2015. It reported its September 2015 quarter results on May 19 after much delay.
Ricoh India has been in the news for quite some time over the alleged financial irregularities in the accounts.
