First, we must compliment Varinder Bansal of CNBC TV18. While all other anchors are busy talking of frivolous issues like cricket and mouthing sweet nothings, he is at the forefront, asking tough questions and demanding answers from managements.
In the past, Varinder Bansal has busted the infamous “Rakesh Jhunjunwala – Surana Solar scam” and also revealed top secrets of Bollywood Siren Kimi Katkar’s “3200% gains stock”.
In the case of Ricoh India, Varinder Bansal thundered:
Saga of Ricoh India – an MNC is very disturbing. Management has to come ahead & report results; tell investors why so much delay happening
— Varinder Bansal (@varinder_bansal) March 31, 2016
In an earlier piece, I speculated that something is definitely amiss because Ricoh India had stated that it had appointed an “independent agency” to look into the accounts and had also sent the employees in charge of the accounts “on leave”.
However, it appears that all of us had underestimated the gravity of the situation. We had assumed that the employees being sent on leave are low level staff such as the accountant and the cashier. To everyone’s shock and surprise, the entire top brass comprising of the MD/ CEO, CFO and VP/COO have been sent packing by the Company.
This is revealed in Ricoh India’s latest release:
“Ricoh India Ltd has informed BSE that:
“With respect to the disclosure letter dated March 29, 2016, the Independent Agency, which comprise of an independent law firm and accountants, has been appointed to assist the Audit Committee to better understand certain areas where the auditors had emphasized further review is presently conducting a review and the same is likely to be completed soon.
Name of the officers, who have been requested to take leave with pay during the review process, are:
(i) Mr. Manoj Kumar, the Managing Director and Chief Executive Officer;
(ii) Mr. Arvind Singhal, the Chief Financial Officer; and
(iii) Mr. Anil Saini, the Senior Vice President and Chief Operating Officer.
Name of the officers, who shall discharge the functions on behalf of the officers sent on leave, are:
(i) Mr. A.T. Rajan would be in-charge and discharge the functions of the Chief Executive Officer and the Chief Operating Officer.
(ii) Mr. Bibek Chowdhury would be in-charge and discharge the functions of the Chief Financial Officer.”
It is also significant that an “independent agency” in the form of a firm of Chartered Accountants and a law firm have also been roped in to examine the accounts. This clearly indicates that there are serious implications of corporate fraud suspected.
Prima facie, the sending “on leave” of the top management so that they do not interfere in the investigation implies that the Company suspects their complicity in whatever misfeasance has happened.
Now, in this sorry state of affairs, it would be naïve for anyone to still believe that everything is hunky dory at Ricoh India. Instead, we have to brace ourselves for some gruesome revelations.
It is notable that Manoj Kumar, the MD/ CEO, had in an earlier interview in December 2015 downplayed the delay in furnishing the audited results as a “procedural delay”. He also said that “There are no accounting irregularities and there is nothing wrong with recording of sales”. However, given that he is one of the employees sent by the Company “on leave”, there is not much credibility that can be attached to his statement.
The unfortunate part is that retail investors are now totally trapped. The BSE has reduced the lower circuit limits to 2% from 5%, making any sort of escape impossible.
Ricoh India circuit reduced to 2%…. Slow and Painful death (Halal Certified)
— Amit Anam (@amitanam) April 1, 2016
Thank you @RicohIndia for a great FY ending gift. Price will fall more as funds exit. https://t.co/ZWpZiV9ls4
— Ashish Khokha (@ashishkhokha) March 23, 2016
@viewtotal @ashishkhokha @RicohIndia agree Management is hiding fraud, change in auditors is not unusual.Something serious wrong not reveale
— RATAN (@SURANARP) April 2, 2016
Meanwhile, the mood at MMB is also somber. Investors appear to have resigned themselves to their fate.
“i am unable to sell ricoh india shares as there are no buyers.kindly guide me what should i do now. Daily 5 percent loss.” sumedha8562 asked pitifully.
“small investor to aisi company me fash jata hai bechne ka moka hi milta” s4,sandip1989 added mournfully.
“sayad aapne jeevan mrityu film nahi dekhi.Dharmendra wali.” ku_ch_1973 said in a philosophical tone.
The entire episode is a shocking blow to our confidence. If we cannot trust a so-called blue chip MNC backed by illustrious stock wizards with our hard-earned money, who can we trust?
Please don’t exaggerate & put some TV show host on a pedestal.
Sec 177 of Companies Act
an excerpt
“Right to be heard The auditors of a company and the Key Managerial Personnel (KMP) shall have a right to be heard in the meetings of the Audit Committee when it considers the auditor’s report but shall not have the right to vote.”
Something wrong True,
No decision Till the results are declared. Hope kpmg is doing right.
Myself Dr Mtesh Shah hold ricoh and invested in ricoh in every decline ..i put my hardcore money in this stock….i sold my remaining stocks portfolio and repeatedily brought RI…almost 1 cr i invested ..my position is very bad …last one month i try my level best to find out facts…but no one can suport me …wat to do ?? Pls help me ..i have only RI in huge quantities
You have two options only. Either you sell now before there is any severe bad news and take your losses. Rest assured, if you reinvest in news stocks such as Dai ichi karkaria, suprajit engineering, tcil, cadila for the long term you will recover your eventual loses.
The second option is you wait for this to unfold and hope it is more of a laughable scenario. Unfortunately logic points to this not being true. And if the scenario is basically validated then this stock will be ruined.
Sit down, take a second to calm down, and choose one option. 1 Crore is a good amount to invest. Even if you have lost 49 lakhs, you can invest 51 lakes in a better company and return to profit making.
Enjoy. Its you who is responsible for your investment. Why look for answers here when you invested with so little work.
lol harsh
look at the other guy even advising on how the doc can recover his losses with stock specific “readymade” picks served on a platter
no wonder, people fall for it
did you do any research work before you bought this stock? or did you buy this stock because it is hyped up on message boards like this one? you should take this as a lesson and your loss as a tuition fees for this lesson. It will save you from getting into similar situations in the future.
Store one retails could be a multibagger stock of Year 2016. Great results posted by indiabull group company . Sales doubled in Sept to Rs 79 Cr from Rs 36 Cr. Profit up by 187 Cr and EPS for the quarter gone to 4.84 from 1.69. If the same performance is continued EPS for one year could be in range of Rs 15- Rs 20. Operating margin and ROCE is impressive. CP is Rs 65. Any feedback/comments are invited.
Store One retail, as its name indicated is not in retail business. it is in construction equipment hiring business where large number of un organised companies/individuals are doing same business. Mainly Store one retail concentrated in Mumbai. better to accumulate slowly in small number and book profits in the same manner.
One positive is it is in india bulls group.
Disclosure : Iam invested in this stock.
How about Management Integrity?. Can it sustain the revenue, profit ma?rgin and growth for long term?
Store one retail is one of the biggest wealth destroying company if I remember correctly. The company was earlier known as Indiabull retail XXXX. They acquired Megamart and it was one of the biggest wealth destroying gamble every taken. Share price came crashing down from 700-800 to INR20.
These activities happened about 10 years back.
This is a lesson.
I also lost in Sharon Bio, (n many small investments in dozens of companies – booked losses) but have abandoned it for zero or all. Wont see it till it bounces back to my purchase price or dries to nil.
That’s why DIVERSIFICATION is COMPULSORY….
Also don’t play much in concept stocks after it becomes frenzy…. Even if the co is honest n good, some big clever big traders/investors n their team like RJ, Maheshwari, Porinju etc etc. would snatch ur money by their brutal skills of playing on volume and price….
I can help u by giving some of my best investment picks learnt very patiently in last 3 years through huge self study + paid services as well… BUT all are for 2-5 years at least..
[1] MCX can get ur money back in 1 to 2 years probably. At present its trading @ real PE 15… 30% bounce from this level can happen any month…As exchanges trade @ PE 20.. Last Q volumn was the poorest..from here on it has to go up n up..
[2] Granules India can be a multiplier in long run. at least double in 1-2 years.
[3] Camlin fine sciences – minimum 300 in 2 years…500 to 600 in 4-5 years
[4] Shilpa Medicare sales will grow more than 10 times in next few years So profit n share price should conservatively grow at least 5 times or more….
[5] SPARC is accumulate below 300 slowly.. It will gain suddenly any time after a year or 2 due to increase in royalty..
[6] United Spirit – is available at good price.- buy 50 % @2500. Buy another 25% @ either 3000 or 2000 whichever comes first. Buy another 25% only if it falls to 16-1700…. Once it will become independent will cross 5000 very fast…
[7] Avantel – accumulate around 60 to 110 – and forget – very small part of portfolio.
[8] Kingfa / Hydro S & S – Always keep control over ur greed and buy following some discipline mentioned for United Spirit.
[9] Shreya Shipping – Always keep control over ur greed and buy following some discipline mentioned for United Spirit.
[10] Dredging corp – deserves investment – It should do extremely well in long run if water ways are taken seriously…as Mr Gadkari talks every time, it seems realistic.