Indian IT Firm Files Insolvency Claim Against Ricoh India for Alleged Non-Payment (Updated)
Ricoh Company of Tokyo, Japan, reported yesterday that its Indian subsidiary, Ricoh India, announced on September 11th, that its vendor and a Ricoh India creditor, Fourth Dimension Solutions , an IT firm headquartered in New Delhi, filed a petition with the National Company Law Tribunal in India to initiate an insolvency-solution process under the Insolvency and Bankruptcy Code of India.
Fourth Dimension Solutions’ claim against Ricoh India is based on the alleged non-payment of a disputed debit note that Fourth Dimension Solutions unilaterally raised as alleged damages for a contract determination.
Ricoh India states that its doesn’t agree with these claims and “is pursuing the matter through legal representation.”
Ricoh Company noted that, under Indian law, the commencement of insolvency solution process is decided by the National Company Law Tribunal, but at that time, the claims by FDS will be recognized together with confirming the existence of a default on behalf of Ricoh India.
Ricoh India has stated that it will dispute the existence and validity of the claims in the petition by FDS and that “Ricoh India is taking appropriate actions to overcome this issue.
According to The Nikkei Asian Review in Japan, “in the wake of an accounting scandal uncovered in 2015, Ricoh India undertook a restructuring that included canceling a sales contract with Fourth Dimension Solutions…Fourth Dimension maintains that it is owed damages for the termination, a claim that Ricoh India disputes.
Ricoh Company of Japan guaranteed a maximum of 28.8 billion yen ($261 million) of liabilities for its Indian unit as of the end of March 2017. Last year, India enacted a new bankruptcy law that allows creditors to petition to initiate insolvency proceedings against debtors.
Trading in the Bombay Stock Exchange, Ricoh India has been suspended since last year for failing to comply with listing requirements.
Editor’s Note: On October 4, 2017, Ricoh reported that Ricoh India announced on October 3, 2017 that the National Company Law Tribunal (NCLT) in India rejected the petition of Fourth Dimension as a creditor of Ricoh India. Fourth Dimension has wirthdrawn its petition.
Ricoh of Tokyo also reported that there will be no no changes to its published financial outlook for its current fiscal year that will end on March 31, 2018.
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- August 2016: Ricoh India Employee Says She was Threatened into Naming Ricoh India Managment Involved in Accounting Irregularities
- July 2016: Ricoh India Chairman and Director Takano Resigns in Wake of Accounting Scandal
- July 2016: Ricoh India’s Full-Year Loss Estimated to Be 17.1 Billion Yen in Wake of Accounting Scandal
- June 2016: Ricoh India Suspends Top Officers in Wake of Financial Irregularities
- May 2016: Ricoh: Ricoh India’s Failure to File Financial Results ‘Unprecedented’; Alleged ‘Massive Financial Irregularities’