Mumbai: The strong stand taken by the minority shareholders of Ricoh India asking the company to sack the audit committee has given a strong signal to India Inc that any misadventure with corporate governance norms would be met with muscular response.
Following the mismanagement of financial affairs of the company, minority shareholders have requisitioned an extra ordinary general meeting on August 5, 2016, asking the audit committee to be sacked. “This is not the first meeting to be requisitioned by shareholders, but it certainly marks a new milestone. It will set a precedent and would definitely inspire shareholder activism against mismanagement of company affairs in India,” said Amit Tandon, founder and MD of Institutional Investor Advisory Services (IiAS), a corporate governance and proxy advisory firm.
Earlier, shareholders of Sanghi Industries called a similar meeting, which was then postponed indefinitely. “Last year shareholders of S Kumars Nationwide enacted what can best be described as a circus. There may have been a few others, but most of these were without merit. But this time a substantive, well documented agenda is being put to vote where the parent itself has been forced to pay the price,” he added.
Ricoh India failed to file both its September 30 and December 31, 2015 quarterly results. When the September 2015 results was finally announced on May 18, 2016 after conducting a detailed financial review, the audited accounts did not reflect true and fair picture of the company.
The company’s shares were also suspended from trading. One of the positive things that had happened in this case according to Mr Tandon is that the parent company Ricoh Japan has decided to infuse funds into Ricoh India to cover up the loss of Rs 1,100 crore incurred for the year ended March 31, 2016....