Ricoh India Under Sebi Lens for Irregularities
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.