Ricoh Could Wind Up Its Operations in India

Originally written and published at varindia.com

Ricoh Could Wind Its Operations in India

Ricoh is a global technology company that has been transforming the way people work for more than 80 years. Under its corporate tagline – imagine. change. – Ricoh continues to empower companies and individuals with services and technologies that inspire innovation, enhance sustainability and boost business growth. Its products include document management systems, IT services, production print solutions, visual communications systems, digital cameras, and industrial systems.

Ricoh India Ltd. is a part of Ricoh Group, headquartered in Tokyo. The Ricoh Group is a global technology leader and operates in approximately 200 countries and regions. In the financial year ending March 2017, Ricoh Group had worldwide sales of 2,028 billion yen (approx. 18.2 billion USD). Ricoh has been present in India for over 37 years, and operates through a robust Pan India Network of 17 offices and over 1,000 business partners.

On 3rd August 2017, Ricoh Corporate Vice President Noboru Akahane was appointed Chairman of Board of Directors at Ricoh India, after Winham stepped down from this role.This announcement wasbeen made to the Bombay Stock Exchange. On 27th October, 2017, Ricoh President and CEO, Yoshinori Yamashita  announced in a press conference that Ricoh Japan will cut off financial support to its Indian arm, Ricoh India Limited. When further asked as to whether the Indian unit will be liquidated, Yamashita replied, “I expect to a certain degree.” This was a hint as to what could be expected of Ricoh India in coming months.

Ricoh India Limited has been mired in controversies since then and was trying to recover after its parent company, a 73.6% majority shareholder, had pulled the plug by withdrawing all financial support to it. Since then, Ricoh India has been maintaining that they are trying to bring about necessary changes in its operations so that they are able to survive this major financial impact.

However, all the activities being worked out were under wraps without passing any informing on any such matter, neither to its employees, partners and minority shareholders nor to the stock exchange. They have willfully defaulted in many areas where, as per Resolution 30 of the SEBI (LODR), they should have informed BSE regarding such material information.

According to varindia.com, Ricoh India management has secretly entered into an agreement in December, 2017 with E&Y, a Global consulting firm, to provide them an opinion regarding filing of winding up petition under Section 10 of the Insolvency and Bankruptcy Code. Although this agreement was signed off in December, 2017, when all the independent directors of the company had resigned, the Board on its own behalf had approved this agreement. However, the company still refrained from informing the stock exchange of such matters relating to the affairs of the company. The intention behind this secrecy is unknown. With this, the reputation of Ricoh has come under stake, since there are thousands of employees working in the organization and they have to look for alternate jobs, including the impact on creditors and shareholders. It is a sign of complete miss-management and a question that is raised is – is Ricoh Japan management knowingly violating the norms of corporate governance?  It seems Ricoh India management wants to keep everything under wraps and are acting secretly so that they do not have to face the ire of the statutory and corporate governance authorities.

Ricoh India has recently facied severe financial stress. Currently, the company may not able to honor its debt obligations towards creditors in India. The company’s script is currently suspended for trading due to compliance issues cited by Bombay Stock Exchange(“BSE”). As per the law, without intimating minority shareholders through BSE and spending public money for Insolvency and bankruptcy Code, 2016 (IBC) consulting is completely against SEBI.