The minority shareholders of Ricoh India have called for an extraordinary general meeting (EGM) of the company on August 5 to take up the issue of sacking the current audit committee. The development comes within a fortnight after Ricoh India, the Indian arm of Japanese firm Ricoh, admitted that the company’s accounts have been falsified and accounting principles were violated, leading to a loss of `1,123 crore. According to proxy advisory firm IiAS, although this is not the first EGM to be called by minority shareholders, it is new milestone. “This time a substantive, well documented agenda is being put to vote where the parent itself has been forced to pay the price,” IiAS said in a report.
Prior to this, shareholders of Sanghi Industries had called for an EGM in 2012. However, it was postponed indefinitely. The minority shareholders of S Kumars had also called for an EGM but there was no material outcome.
The EGM has been called under Section 100 (2) of Companies Act 2013 and the agenda for the meeting includes sacking of all the four members of audit committee and appointing a new independent director for Ricoh India. Ricoh India has also requested Securities and Exchange Board of India (SEBI) to conduct an investigation to ascertain if the incorrect financial statements had any impact on the securities market and investors under Sebi Prohibition of Insider trading Regulations, 2015 and SEBI Prohibition of Fraudulent and Unfair Trade Practices relating to the Securities Market Regulations, 2003.
As per the IiAS, the battle is between the Japanese parent company and its minority shareholders. While Ricoh Japan has expressed its full faith in the members of audit committee, the minority shareholders are supporting a resolution to sack the committee. ” Earlier shareholders grouped together to battle managements — and even today, they are trying to do so in Maharashtra Scooters and Bharat Forge. But, regulations have empowered shareholders, and much more importantly explained to them their rights. Armed with a supportive regulatory environment, managements who let down their shareholders, need to recognise that increasingly it will be these very shareholders who will determine what’s put on the agenda,” IiAS said.
In CY16, the share prices of Ricoh India collapsed significantly as the company failed to file its earnings for quarter ending December 2015 and quarter ending March 2016. The company lost about three -fourth of its market capital in 2016.
Chairman Tetsuya Takano resigns
A week after admitting its accounts appear to have been “falsified”, Ricoh India on Monday said its chairman and director Tetsuya Takano has resigned from the company. The company has appointed Ian Peter Winham as its director/chairman with immediate effect.