Manoj Kumar, the erstwhile Managing Director of Ricoh India, would do well to stay as far away from Dalal Street as is possible because there is a grave risk that he will get roughed up by the investors and punters who have lost their life savings in the Company.
In December 2015, when Manoj Kumar was asked point-blank whether the delay in finalization of the accounts of Ricoh India was due to any financial irregularities, he looked the interviewer straight in the eye and said “There are no accounting irregularities and there is nothing wrong with recording of sales”.
Later, we saw how Manoj Kumar and his colleagues in the Company were sent “on paid leave” while the matter was being investigated by an external firm of auditors and lawyers.
The situation presently is that Ricoh India has admitted to having suffered losses of about Rs. 1,123 crore owing to fraud committed by some unnamed employees.
Whether Manoj Kumar, in his capacity as Managing Director, was unaware of the nefarious activities being carried on under his nose is anybody’s guess. Either he is lying through his teeth or he is a naïve babe in the woods. In either event, he is unfit to hold high office and has to be held accountable for his incompetence/ complicity.
The tragic turn of events has understandably taken its toll over the stock price of Ricoh India. After touching a high of Rs. 1072 on 29th June 2015, the stock is presently languishing at Rs. 218. This means that the stock has lost nearly 80% of its value. On a YoY basis, the stock is down 77%.
In its heydays, Ricoh India attracted the crème de la crème of investors. Marquee names like Ramesh Damani, Radhakishan (Gopikishan) Damani, Kapraj Dharmshi, Kenneth Andrade’s IDFC Premier etc graced its list of shareholders.
Ramesh Damani appears to have smelt that something was wrong somewhere in the affairs of Ricoh India. He sold off a major chunk of his holding whilst the going was good and pocketed mega bucks of up to 800%.
Unfortunately, Kalpraj Dharamshi, the veteran value investor, has not been as lucky. He and his family members collectively hold a treasure trove of 275,000 shares of Ricoh India. On a YoY basis, the value of the shares has slumped from Rs. 29 crore to Rs. 6 crore resulting in a colossal loss of Rs. 23 crore.
Thankfully, unlike novice investors who are helplessly resigned to their fate, Kalpraj Dharamshi is not taking the sorry state of affairs lying down.
Instead, he has marshaled an army of 259 shareholders and arranged for an Extraordinary General Meeting (EGM) to be held on 5th August 2016.
Kalpraj made it clear that he will settle for nothing less than the scalps of the incompetent and unscrupulous management of Ricoh India.
“We also want to remove the directors who have failed in their fiduciary duties towards minority shareholders. Why should they continue?” the veteran investor demanded to know, his eyes blazing with fury.
On the hit-list are the four members of the audit committee, U P Mathur, R K Pandey, Ashish Garg and Hiroyasu Kitada. All four worthies have grossly failed in their duty to conduct a fair and accurate review of the company’s financial statements and have no business to sit on the audit committee of the Company and collect fees is the charge of the shareholders.
The fury of Kalpraj and the other minority shareholders appears to have spooked Tetsuya Takano, the Chairman of Ricoh India. He abruptly resigned from the post. This may be a sensible decision given that he might have been roughed up by the irate shareholders.
Ricoh Japan has sent signals designed to calm the shareholders. It promised to recapitalise Ricoh India to the extent of the estimated losses, without placing any liability on minority shareholders, nor change the current shareholding of the promoters in Ricoh India. This implies that the money will come in by way of a grant or a subsidy.
Kalpraj’s yeoman efforts have brought some respite to the beleaguered shareholders of Ricoh India. They now have a spring in their step, hope in their bosom and something to look forward to.
“YES. HOW EVER DARK NIGHT BE, SUN IS GOING TO SHINE. HOPE. HOPE AND HOPE” udays, a novice investor sang at MMB, echoing the sentiments of thousands of small shareholders whose life savings have been swept away in Ricoh India!