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Indian subsidiary of Japanese imaging and electronics major Ricoh India has filed for insolvency proceedings due to its inability to meet its liabilities.
Application before the National Company Law Tribunal under section 10 of the Insolvency and Bankruptcy Code has been filed by the company to initiate the insolvency proceeding.
The company in the BSE filing stated that the company is currently at a position where it has become incapable of meeting its liabilities and the insolvency proceeding of the company is the best course of action available presently and is in the interest of not only the company but its customers, minority shareholders, employees and other stakeholders.
On January 25, 2018, the Ricoh India’s board has passed a resolution to file an application under section 10 of the insolvency and bankruptcy code and other relevant rules and regulations to initiate the Corporate Insolvency Resolution Process.
Ricoh India in July 2016 has admitted that its accounts have been possibly falsified indicating towards an accounting fraud as at the end of the fiscal year 2015-2016 in the March 2016 the company estimated to have incurred a loss of Rs 1123 Crore.
The Insolvency and Bankruptcy Code provides for a resolution framework which gives corporates an opportunity to clean their balance sheet and reduce their debts. Insolvency and Bankruptcy Code, which came into force in December, provides for market determined resolution in a time bound manner.