Fourth Dimension Solutions, a Delhi based IT solutions and turnkey service firm has approached the National Company Law Tribunal (NCLT) asking to initiate insolvency process against Ricoh India, the Japanese firm’s Indian arm.
Fourth Dimension Solutions (FDS) has filed the petition before the Mumbai Bench of NCLT under the Insolvency and Bankruptcy Code, 2016 citing non payment of dues of more than Rs 428 crore.
The Delhi based firm in its application, a copy reviewed by TeleAnalysis, said it filed the petition after repeated attempts to recover the dues, failed.
While Ricoh India is listed in BSE, Fourth Dimension is listed in NSE. Both the firms have informed their respective bourses about the development.
“Fourth Dimension Solutions Limited (FDS) has filed a petition againnst Ricoh India Limited before the Hon’ble National Company Law Tribunal, Mumbai regarding the alleged non-payment of a disputed debit note which FDS unilaterally raised as alleged damages for a contract termination,” Ricoh said this in a BSE filing.
“We do not agree with the claims made by FDS and are pursuing the matter through legal representation,” it further added.
In Februrary 2015, Ricoh India and FDS entered in to an agreement to execute a part of Government of India’s Rural Information and Communication Technology (RICT) project. The agreement between the two parties involved hardware supply and related service worth Rs 1077 crore.
As per the agreement, according to the application filed by FDS, the payment terms involved was 35% advance payment on hardware and balance 65% on 30 days letter of credit (LC) on hardware and monthly payment for service.
Further Ricoh India Limited was suppose to pay mobilization advance of Rs.100,00,00,000 (One Hundred Crores) to Fourth Dimension Solutions Limited for setting up Service Centers, Help Desk, Solar Installation, Project Staffing etc.
FDS has alleged that Ricoh India has failed in the payment terms and hence liable to pay.
“Thereafter, with a malafide intention, Ricoh India issues a Show Cause notice to Fourth Dimension Solutions vie letter dated 23March 2017, making false allegation that FDS defaulted in meeting contractual obligation,” FDS stated in the application.
However, on 28 March Ricoh India terminated the contract with FDS.
Ricoh India : Not New To Scams
Ricoh India is not new to this type of news. The past couple of years have been quite eventful for the company. From trading suspension at BSE to financial irregularities; from falsifying statements to filing police complaint against own officials, Ricoh India has seen all in this short span of time.
While this case now lies with NCLT, it can be recalled that its parent company, last year, had asked the Mumbai bench of NCLT to order an investigation into the mismanagement of the company’s affairs committed by certain officials.
In the same year, the company had made false statements pertaining to its losses for the year ended March, 2016. However, the company later admitted to have ‘falsified’ statements.
Besides, the BSE has suspended trading of Ricoh India from May 26, 2016 as the company failed to comply with listing norms. The company had delayed in reporting of earnings of its two consecutive quarters – September 2015 and December 2015.
The company’s share price has since gone south. From a high of Rs 1070 in July 2015, the share price of Ricoh India is now trading at Rs 193.