Ricoh India Files for Bankruptcy Insolvency Proceedings
The troubled India subsidiary of Ricoh Company of Japan has filed for bankruptcy.
“The company has come to a position where it is unable to meet its liabilities and this course of action has been decided in the best interest of the company, its customers, employees and minority shareholders and all other stakeholders,” the company said in a BSE filing.
On January 25, 2018, Ricoh India’s board had resolved to file an application under Section 10 of India’s Insolvency and Bankruptcy Code, 2016 (IBC) to initiate the India Corporate Insolvency Resolution Process.
Ricoh Company of Japan issued a statement noting that: “Ricoh India’s relationship with its major vendor has deteriorated, and it resulted in non-fulfilment of contracts by the vendor and failure to collect receivables from business partners. Ricoh India announced that, since Ricoh India has now reached a position where it is unable to meet its liabilities, it decided to file the application in the best interests of its customers, employees, minority shareholders, creditors and all other stakeholders.”
Ricoh Company of Japan also noted that while it had “offered various forms of support to rebuild Ricoh India up” in October 2017, it “reevaluated the restructuring plan and our support for Ricoh India in
response to Ricoh India’s continued deficit and the deterioration of its relationship with its major vendor. As a result of the reevaluation, we made a decision on October 27, 2017 not to provide any additional financial support going forward under the circumstances at that time, in order to minimize the consolidated losses of the Ricoh Group.”
Ricoh Company also noted that “As the largest supplier, creditor and shareholder of Ricoh India, we will closely monitor the decision of the National Company Law Tribunal of India. We recognize the importance of providing services to our customers, and we will make every effort to continue to provide services to our customers in India and maintain the quality of that service going forward.”
In July 2016, indicating a possible accounting fraud, Ricoh India admitted that its accounts appear to be have been “falsified” as it estimated to have incurred a loss of ₹1,123 crore for the fiscal ended March 2016.
- November 2017: Sales up for Ricoh, but Revises Forecast to Reflect Ricoh India Losses
- October 2017: Ricoh Execs to Take Pay Cuts; Ricoh to End Support for Ricoh India (Updated)
- September 2017: Indian IT Firm Files Insolvency Claim Against Ricoh India for Alleged Non-Payment (Updated)
- November 2016: Ricoh Fires Two Executives in Wake of Ricoh India Accounting-Fraud Scandal
- 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