Minority Shareholders Drag Fraud-Hit Ricoh To NCLT For Compensation
Minority shareholders of Ricoh India Ltd. have demanded compensation from the insolvent company and its Japanese parent for losses caused by a drop in its share price after a fraud was detected at the maker of scanners and photocopiers.
Nearly 165 public shareholders owning a combined stake of 2.3 percent filed a petition at the Mumbai bench of the National Company Law Tribunal seeking relief, accusing Ricoh India of oppression and mismanagement. They want Japan’s Ricoh Company to purchase their shares for about Rs 94 crore at Rs 1,029 apiece, the price prevailing as on June 30, 2015 before an accounting fraud at the company came to light.
That stems from financial discrepancies first flagged off by BSR & Co. in the quarter ended September 2015 after it replaced the company’s auditor for a decade, Sahni Natarajan & Bahl, in July that year.
Trading in shares of Ricoh India stands suspended and the company declared itself insolvent after its parent refused to infuse more cash after making good Rs 1,123 crore losses triggered by the fraud.
In the petition, the shareholders said their investments have been blocked. “The minority public shareholders have no exit opportunity, no market for their shares/investment, and it is unclear as to whether, and if so, when the suspension in trading will ever by revoked,” they said.
They not only asked the NCLT to direct Ricoh Company to deposit Rs 93.8 crore with the tribunal, but also to restrain the promoter from selling or pledging the shares. BloombergQuint’s emailed queries to Ricoh remained unanswered.
Ricoh Company directly and through its wholly owned subsidiary owns 73.6 percent stake in its Indian arm.
The petition comes after the market regulator issued an interim order asking for a second forensic audit of Ricoh India’s books. In the last three months, four independent directors, internal auditor, chief financial officer and non-executive non-independent director quit the company.