News Highlight : Corporate affairs ministry may probe Ricoh India for alleged accounting fraud

NEW DELHI, Jul, 22, 2016

The corporate affairs ministry is likely to probe the alleged accounting fraud at Ricoh India , the crisis-hit subsidiary of Japanese technology company Ricoh. 

The ministry may inspect books of accounts of the company for the past six years to ascertain alleged fudging of financial statements for some time now, officials said. 

The Institute of Chartered Accountants of India (ICAI) is already investigating the role of the auditors in this case. Ricoh India could turn out to be one of the biggest corporate frauds to hit the country after the Satyam scandal, a senior government official said.

"ICAI is already probing Ricoh India. The financial statements of last three years are already being studied to zero in on the role of auditors the company had engaged," said the official, who did not wish to be identified. 

In a recent statement to the stock exchanges, Ricoh India said, "It appears that the company's accounts have been falsified and its accounting principles and standards have been violated..Such acts of omission and commission have caused a grave loss to the company and its shareholders"

As per its estimates, Ricoh India had an unaudited estimate of aggregate loss after tax of Rs 1,123 crore for 2015-16. "Violations of the Companies Act are likely to be on various fronts and not on accounting principles alone. There's likely to be gross violation of corporate governance norms as well," the official said 

According to the preliminary findings of PricewaterhouseCoopers (PWC), the company's financial statements of April-June and July-September quarters of 2015 did not reflect a true and fair view of the state of affairs. "Prima facie, it looks as if the company has violated the provisions related to maintaining the books of accounts. The case could be dealt under section 128 of the Companies Act," said Gajendra Pratap Singh, director at PwC India.