The Securities Appellate Tribunal (SAT) has upheld market regulator Securities and Exchange Board of India’s (SEBI’s) findings of fraud and financial misreporting against former Ricoh India managing director and chief executive officer Tetsuya Takano, while reducing the monetary penalty imposed on him from Rs 50 lakh to Rs 10 lakh.
In its November 5 order, SAT held that Takano was actively involved in the transactions with Fourth Dimension Solution Limited (FDSL), promoted by Amalendu Mukherjee, and related entities. These transactions contributed to the misreporting of Ricoh India's financial statements and losses of Rs 1,123 crore.
The tribunal rejected Takano's defence that he had not personally signed documents authorising the release of funds under the vendor financing facility. It observed that, given his position as MD and CEO, it was difficult to accept that he was unaware of the unusual financing arrangement, disproportionate sales and purchases, rising debt and poor realisations from FDSL.
SAT in its order noted, “The fact that FDSL was the sole beneficiary and huge amount was transferred to it without commensurate supply, should have alarmed the MD of the Company, absence of which implies active involvement of the appellant in misreporting of the financial statements”
SAT also noted that Takano had brought a Master Rental Agreement before Ricoh India's board on September 25, 2014, without disclosing that it had already been executed on December 6, 2013. The agreement was placed before the board without adequate financial analysis, the tribunal observed.