Ricoh's troubled Indian arm slapped with insolvency action
Japanese office equipment supplier disputes nonpayment allegations by vendor
TOKYO -- Ricoh's Indian subsidiary is dealing with an insolvency petition launched by a former vendor seeking compensation in a contract dispute, the Japanese office equipment maker said Tuesday.
In the wake of an accounting scandal uncovered in 2015, Ricoh India undertook a restructuring that included canceling a sales contract with Fourth Dimension Solutions, an information technology vendor based in New Delhi.
Fourth Dimension maintains that it is owed damages for the termination, a claim that Ricoh India disputes. Fourth Dimension recently filed a petition with India's National Company Law Tribunal alleging nonpayment of a debit note. The move seeks to initiate insolvency proceedings under the country's insolvency and bankruptcy law.
Ricoh India intends to argue at an upcoming hearing that the complaint is invalid. Japanese parent Ricoh guaranteed a maximum of 28.8 billion yen ($261 million) of liabilities at the Indian unit as of the end of March.
Last year, India enacted a new bankruptcy law that allows creditors to petition to initiate insolvency proceedings against debtors.
Trading in Bombay Stock Exchange-quoted Ricoh India has been suspended since last year for failing to comply with listing requirements, according to the bourse.