The OEM has undertaken a recapitalisation of the subsidiary after it experienced financial issues this year.
Ricoh India’s headquarters
The OEM’s subsidiary had seen trading suspended in May “for non-compliance” after fraud allegations, with The Recycler reporting in June on the OEM facing global financial issues in addition to the fraud allegations, with Ricoh India notifying the Bombay Stock Exchange (BSE) of “progress on an ongoing investigation into failure to file financial results”, and as “details of an alleged fraud […] began to emerge”, Ricoh’s share price fell by 25 percent.
The subsidiary was then suspended from trading on the BSE, but was trying to get trading restored in July, filing a petition before the Mumbai bench of the National Company Law Tribunal. The BSE suspended the OEM for “non-compliance with listing norms”, after a “delay in reporting of quarterly earnings” in both September and December 2015, only “one of the factors that led to the suspension”.
Ricoh India admitted that accounts appeared to have been “falsified”, with an estimated loss for the last financial year set at Rs 1,123 crore ($167 million/€151 million), and Ricoh had “proposed to recapitalise the firm for the loss”, in order to “cover for the estimated losses without dilution of the public shareholding”. In April, Managing Director and CEO of Ricoh India Manoj Kumar resigned from the board, after “being asked to go on leave amid an audit”.
This proposed recapitalisation has now taken place, with Ricoh stating that “we initiated the process of filing a petition with the National Company Law Tribunal [NCLT] in India regarding a recapitalisation of our consolidated subsidiary” in July, with the NCLT issuing its order on 24 August “granting approval for the recapitalization of Ricoh India by way of cancellation of the existing shares” before “issuance of the exact same number of shares” for Rs 11.23 billion ($167 million/€151 million).
The OEM added that on 14 October “the requisite resolutions were approved at an Extraordinary General Meeting of Shareholders”, and on 15 October 15, Ricoh India’s Board of Directors “agreed the cancellation, allotment and issue of shares pursuant to the recapitalisation”. The OEM concluded that “if there is any information that should be disclosed with regard to Ricoh India it will be shared promptly”.