Accounting fraud: Ricoh India estimates loss of Rs 1,123 cr for FY16

New Delhi: Indicating a possible accounting fraud, troubled Ricoh India Tuesday admitted its accounts appear to be have been “falsified” as it estimated to incur a loss of Rs 1,123 crore for the fiscal ended March 31, 2016. Meanwhile, Ricoh Company Ltd, a promoter entity of the Indian subsidiary of Japanese imaging and electronics major, has proposed to recapitalise the company for the loss.  The disclosure by the Indian unit also prompted the promoter to approach National Company Law Tribunal (NCLT) against the BSE-listed firm and its certain officials suspected to have indulged in “mismanagement”. In its petition, the promoter has sought restraining the statutory authorities from taking any coercing measures against Ricoh India Ltd and restore its share trading, which has been suspended for penal reasons even as a probe is already on by various agencies and regulators including Sebi into its affairs. While the promoter entity offered to recapitalise Ricoh India for losses, sources said certain promoter entities as well as existing and earlier top management personnel at the firm are already subject of the ongoing regulatory probes. On its part, Ricoh India, said the disclosure follows an internal investigation it has been carrying out to ascertain its financial position and probable roles of few officials of the company. The investigation was commissioned following preliminary findings of audit firm PriceWaterhouseCoopers found that Ricoh India’s financial statements for 1 April, 2015 to 30 September, 2015 “did not reflect a true and fair view of the state of affairs of the company.” “As per the investigation, it appears that the accounts have been falsified and the company’s accounting principles and standards have been violated,” Ricoh India said in a regulatory filing. Earlier, under pressure from minority shareholders, Ricoh India had said it will hold an extra-ordinary general meeting (EGM), on 5 August, to discuss removal of four directors and an appointment of a director. In April, the company’s India’s MD and CEO Manoj Kumar had resigned from the board after being asked to go on leave amid an audit in the company by a committee. The company statement on estimated loss also said that such acts of omission and commission have caused a “grave loss” to the company and its shareholders. “The unaudited estimate of aggregate loss after tax for the financial year ended March 31, 2016 would be Rs 1,123 crore,” it said. Ricoh India estimates that June 2015 quarter registered a profit of Rs 40 lakh, followed by losses of Rs 147.4 crore (September 2015 quarter) and Rs 976.5 crore (October-March 2015). It added Ricoh will ascertain the conclusive actual amount of the loss suffered by the company in the fiscal 2015-16, which would be subject to audit and confirmation by the statutory auditors of the company. Ricoh India had last reported its quarterly numbers on 19 May, 2016 for September 2015 quarter.