SEBI has ordered Ricoh India and its directors to extend "necessary cooperation" to the auditor appointed for inspecting the books of accounts of the firm and confirmed its interim ruling in the matter, restraining several individuals from the markets "till further directions".
Through an interim order passed in February, the regulator had banned seven individuals, including Ricoh India's former MD and CEO A T Rajan, from the securities market for alleged fraud pertaining to the distortions in the financial statements of the company.
The other six were T Takano, Manoj Kumar, Arvind Singhal, Anil Saini, Bibek Chowdhury and Amalendu Mukherjee.
Takano and Kumar had both held in the past, the position of managing director and chief executive of Ricoh India.
"I note that the facts of the case clearly point towards large-scale irregularities in the business transactions of the company and manipulations in its books of accounts amounting to fraud," SEBI Whole Time Member G Mahalingam said in a 45-page fresh order.
"... I find it appropriate not to vacate the directions issued against the noticees (seven individuals) vide the interim order at this stage, in the interest of the investors and the integrity of the securities market," he said and confirmed the earlier directions.
The regulator had also ordered the BSE to appoint an independent auditor for conducting a detailed forensic audit of the books of accounts of Ricoh (for the financial year 2012-13 onwards till date) and directed the firm, its directors and the seven individuals to extend all necessary co-operation to the auditor.
In the fresh order, the regulator said it is understood from the various email communications exchanged between the BSE and C J S Nanda & Associates, the forensic auditor appointed by the exchange, that Ricoh "is not extending full co-operation to the forensic auditor in providing the documents, information and clarifications required by the auditor, in a timely manner".
"Taking a serious view of the same, it is hereby directed, once again, that Ricoh and its directors shall extend all necessary co-operation to the forensic auditor in making available the required documents and clarifications, strictly within the time frame specified therefore.
"Any failure to comply with the said direction on part of Ricoh and its directors may lead to drawing adverse inferences against them," the regulator said.
Besides, SEBI also extended the time for submission of the forensic audit report by the auditor to the regulator till September 30, 2018.
"This order shall remain in force till further directions," the regulator said.
SEBI had received a letter in April 2016 from Ricoh wherein the firm, on the basis of preliminary findings of a forensic review of its books of accounts by Pricewaterhouse Coopers, had stated that its financial statements for the quarters ended June 2015 and September 2015 did not reflect a true and fair view of its state of affairs.
Ricoh requested the regulator to conduct an investigation inter alia in respect of possible violations of provisions of PFUTP (Prohibition of Fraudulent and Unfair Trade Practices) Regulations pertaining to the said incorrect financial statements of the firm.
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