A man carries a boxed Ricoh Co. Aficio SP 100 printer in Nehru Place IT Market, a hub for the sale of electronic goods and computer accessories, in downtown New Delhi, India (Photographer: Graham Crouch/Bloomberg)

SEBI Orders Forensic Audit Of Ricoh India’s Books

Subscribe to Bloomberg | Quint
The Daily Newsletter
News & Stock Alerts

Markets regulator SEBI today cracked down on the alleged accounting fraud at imaging and printing equipment maker Ricoh India Ltd. as it called for a second audit of its account books and banned seven persons including former top executives from accessing the securities market.

Also Read: Did The Fraud At Ricoh India Begin Much Before The Company Claims?

The seven named in the order are:

  • T Takano: Managing director and CEO till 2014-15
  • Manoj Kumar: CFO till 2013-14, EVP and CEO in 2014-15, and MD and CEO in 2015-16
  • AT Rajan: SCM and Marketing head in 2014-15 and 2015-16
  • Arvind Singhal: CFO in 2014-15 and 2015-16
  • Anil Saini: ITS business head in till 2014-15, and SVP and COO in 2015-16
  • Bibek Chowdhury: Operations Audit Group Head in 2015-16
  • Amalendu Mukherjee: MD of Fourth Dimension Solutions Ltd.

The market watchdog directed the company, its directors and the seven people named in the order to extend all necessary co-operation for the audit and furnish all information sought. The independent audit firm, which SEBI will appoint, must submit a report within three months from the date of appointment.

All seven persons named in SEBI's order have been "restrained from accessing the securities market or buying, selling or otherwise dealing in the securities market in any manner whatsover". It has also asked them to file in a reply regarding the same within 21 days from receipt of the interim order-cum-show cause notice.

Amalendu Mukherjee, one of the seven executives named by SEBI, said he will reply to the order in due course.

We respect the order as issued by SEBI and would provide the necessary reply to them in due course. We would also like to state that we are partners of Ricoh India and it is normal to have the name of some big partners come up in such matters. We would also like to state the fact that the order has been issued on basis of a report of one of our competitor and the consultancy firm which was banned for two years by SEBI itself last month.
Amalendu Mukherjee, managing director of Fourth Dimension Solutions Ltd.
It is a welcome move to conduct a fair investigation. Let the truth come out.”
Ex- Ricoh CFO Manoj Kumar

BloombergQuint attempted to get in touch with all the remaining five executives named by SEBI as well. However, some of them were either unavailable and/or unreachable or haven’t responded to calls/email queries yet. Meanwhile, Ricoh India and its Japanese parent haven’t replied to email queries.

Also Read: Ricoh India Taken To NCLT By Fourth Dimension Solutions

Unlike last time, SEBI will be appointing an independent audit firm for the audit and the period of audit will extend from financial year 2012-13 till date. However, the costs of the audit will be borne by Ricoh.

Earlier, Ricoh India had appointed Shardul Amarchand Mangaldas as legal consultant who had then appointed PwC to conduct a forensic audit for a limited period of six months starting from April 1, 2015.

The SEBI move comes after its Japanese promoter Ricoh Company Ltd. announced that it will not provide any financial support to Ricoh India and after the company filed for an insolvency with the NCLT, Mumbai. Recently, a slew of Ricoh India’s key officials resigned from the company. Its four-independent director, internal auditor, chief financial officer and non-executive non-independent director resigned in the last three months.

RK Agarwal, one of the existing shareholders in Ricoh India, called the SEBI order as a “ray of hope”. He believes it’s a step in the direction of retail shareholders getting compensated for their losses.

Investors were made to believe that the company’s prospects are bright. But the price fall came after the questionable numbers and corporate governance issues.
RK Agarwal, Shareholder Of Ricoh India

The full SEBI order can be seen here.

BloombergQuint
Stay Updated With Law & Policy News On BloombergQuint
Subscribe to Bloomberg | Quint
The Daily Newsletter
News & Stock Alerts