Ri­coh In­dia Un­der Sebi Lens for Ir­reg­u­lar­i­ties

The Economic Times - - The Jaitley Interview - Ra­jesh Mas­caren­has & Reena Zachariah

look­ing into com­plaints in­clud­ing the de­lay in an­nounce­ment of re­sults and the rea­sons that caused the de­lay

Mum­bai: Ri­coh In­dia, a dar­ling of Dalal Street in the first half of 2015, is un­der reg­u­la­tory glare amid al­le­ga­tions of fi­nan­cial ir­reg­u­lar­i­ties that re­cently led to its top of­fi­cialsstep­ping­down.TheSe­cu­ri­ties and Ex­change Board of In­dia (Sebi) is look­ing into com­plaints in­clud­ingth­e­lag­i­nan­nounce­ment of re­sults by the com­pany and the rea­sons that caused the de­lay, an of­fi­cial close to the mat­ter said.

Ear­lier this month, the com­pany asked its top ex­ec­u­tives in­clud­ing man­ag­ing di­rec­tor Manoj Ku­mar, chief fi­nan­cial of­fi­cer Arvind Sing­hal and Anil Saini, its chief op­er­at­ing of­fi­cer, to go on leave amid an on­go­ing au­dit by a com­mit­tee in­clud­ing an in­de­pen­dent law firm and ac­coun­tants. PwC has been hired by par­ent Ri­coh Ja­pan to con­duct a foren­sic au­dit on the com­pany. Sources said PwC had com­plained to the board of Ri­coh In­dia that some of the of­fi­cials were not shar­ing in­for­ma­tion and co-op­er­at­ing with them. Fol­low­ing this, the board asked the top of­fi­cials to go on leave.

In re­sponse to a de­tailed ques­tion­naire, a Ri­coh In­dia spokesper­son said: “Our au­di­tor BSR con­sul­tant had high­lighted cer­tain ar­eas to be re­viewed fur­ther by a sep­a­rate agency. In or­der to do that we have ap­pointed an in­de­pen­dent agency to work with the Au­dit Com­mit­tee to com­plete the re­view.” The spokesper­son de­cline to

share de­tails of the in­ves­ti­ga­tion till the re­view by an in­de­pen­dent agency is com­pleted. “The CEO, CFO and COO of the com­pany has been asked to go on leave, only to en­sure an in­de­pen­dent and fair in­ves­ti­ga­tion”. An email sent to PwC seek­ing com­ments didn’t elicit any re­sponse till the time of go­ing to press. The com­pany has not filed quar­terly re­sults since June 2015 quar­ter. Ac­cord­ing to sources, the com­pany has over­stated the sales num­bers by stat­ing the amount re­ceiv­able from long-term con­tracts into sin­gle year and also over in­voic­ing. The com­pany re­ported 96%, 78% and 80% jump in net sales for the quar­ter ended June 2016, March 2016 and De­cem­ber 2015, re­spec­tively, from the same quar­ters a year ago. The stock, which rose 265% from Jan­uary 2015 to June 2015, has been pounded from the record highs. Af­ter touch­ing a high of ₹ 1,072.25 on July 2, the stock has dived 65% to ₹ 370 on Mon­day. Some of the big­gest names on Dalal Street were in­vestors in Ri­coh In­di­alastyear.Ac­cord­ing­toan­nual re­port of 2014-15, Ramesh Da­mani hel d 1 . 2 5 l a kh s hares a nd Gopik­is­han Da­mani held 1 lakh shares. IDFC Mu­tual Fund held 1.95%stake in the com­pany. Mukul Agar­walof ParamCap­i­tal­held3.53 lakh shares through his firm and 1.6 lakh shares in his per­sonal ca­pac­ity. It is not clear whether these in­vestors have ex­ited their holdings in Ri­coh as the com­pany is yet to dis­close the lat­est share­hold­ing to the stock ex­changes.

Newspapers in English

Newspapers from India

© PressReader. All rights reserved.