RICOH - CORRECTING THE SULLIED IMAGE
By Ruma Dubey
Finally, Ricoh India seems to have concluded its internal audit and come out and told us all what we all knew for some time now – apparently the company’s accounts have been falsified and accounting principles and standards have been violated. And based on the internal audit, the company has said that it ended FY16 with a loss of Rs.1123 crore.
The parent company has filed a petition through its subsidiary, NRG Group, which is willing to recapitalize the losses incurred by the company without diluting members of the public. It has said that it wants to restore trading in the scrip and restrain statutory authorities from taking any coercive action against the company.
Trading in the company’s shares were suspended with effect from May 26 on account of non-compliance with Regulation 33 of Sebi Listing Regulations, 2015 for two consecutive quarters - September 2015 and December 2015.
Post this, the company was placed in the ‘Z’category. Before all this broke out, in April, In April, the company asked its top three management personnel – MD and CEO, CFO and COO to proceed on leave without pay. Shockingly, the auditors have pointed out that there is discrepancy in the product pricing , with back dated and unsupported transactions popping up in the books. Where is ethics gone from this world?
Surely, post this a penalty would be issued and the company will take the necessary action against the fraudulent personnel involved. But major statutory action if the company brings it all out in the open, might not happen. What could also happen is that after it declares its Q1FY17 numbers and before that Q3 and Q4FY16, only then will trading probably begin in the stock.
The good part in this ugly story is that the parent company took the responsibility and decided to get to the root of the issue unlike so many suspended companies, who never bother as their prime motive as such was to hoodwink the public.
Here, it comes forth clearly that the parent company wants to continue being in India and will go on with its operations – Ricoh is well known name in field of photocopiers, copy printers and laser printers. It is a pity that a few people for money, sullied the reputation of the company which was so painstakingly built over the past few years.
Maybe this Ricoh matter will soon get resolved and the stock will once again get traded. But to ensure that you do not fall prey to companies, which might not be like Ricoh, wanting to correct the situation, then you can kiss your money goodbye.
So under the circumstances, what do those holding shares of Ricoh do? Best is to exit whenever you can. Yes, it will mean booking a loss but best is to exit as it is not worth going thorugh all this trouble along with the company; why should you have sleepless nights when you can actually remove this problem from your life? Yes, simple and straight advice - get out. The company is trying to correct a bad situation but its an uphill task.
