Losses At Fraud-Hit Ricoh India Hit Japanese Parent
Troubles of imaging and printing equipment maker Ricoh India Ltd. have hit its Japanese parent.
Ricoh Company Ltd. lowered its profit estimates by 10,000 million yen (Rs 571 crore) to factor in losses at its fraud-hit Indian arm, the Japanese company said in a filing. It has taken a charge of close to 30,000 million yen (Rs 1,711 crore) for its India business in the year to March 2018.
Due to the anticipated losses arising from the subsidiary, “we revised downwards the forecast of our operating income, profit before income taxes and profit attributable to owners of the parent”, it said.
Ricoh Company reiterated that it will not provide any additional financial support to the India business. It had infused Rs 1,123 crore last year after Ricoh India said that it estimated a loss as its accounts appeared to be have been “falsified”.
Until now, we have offered various forms of support to rebuild Ricoh India…. We have made the decision not to provide any additional financial support going forward, in order to minimise the consolidated losses of the Ricoh Group.Ricoh Company Filing
Ricoh Company said its top executives will take voluntarily pay cuts of 15 percent for three months. Zenji Miura, former president and chief executive officer and working as an executive advisor, will take a 30 percent cut for three months and will resign.
Ricoh’s India business had been a concern, so it’s a positive “from the standpoint of avoiding greater losses”, Jefferies (Japan) Ltd. said in a note.
Nomura blamed the Japanese company’s troubles on “inadequate management of an emerging market subsidiary”. The Ricoh Company didn’t try to conceal the issue, and the brokerage does not expect it to develop into a major problem, it said in a report said.