By Ruma Dubey

Today, in a TV interview, the former MD and CEO of Ricoh India said that he was unaware of wrong doings in his company.

This is as shocking as a father saying that he did not know that his son was a drug addict – which is how it is most of the times. But doesn’t it mean that the father forgot his responsibility of taking care, let his guards down, did not watch the child, did not see the deterioration till it was very late?

That’s precisely how it is with Ricoh – how can the man in-charge of the company throw up his hands and say that he was unaware? He took charge only on 1sy April 2015, yet when he took over did he not look into the books and notice the discrepancies? Or was he working like Manmohan Singh – he is not corrupt but the rest all were. That speaks so poorly about the leadership.

Ricoh India is in hot water as far as SEBI and BSE is concerned. The company has received a notice from the BSE to comply with SEBI’s listing regulations within the next 21 days. If the company does not comply with the same, it now faces suspension of trading and 73% holding of the promoters currently stands frozen. The D-date is 26^th May and in all likelihood, it will get suspended.

The company has not filed its accounts for Q2 and Q3FY16 and it is placed in the Z category. The company had given an explanation that it had appointed new auditors following which it got delayed in posting the quarterly numbers as the new auditors could not audit the accounts due to the review process by the independent agency and the suspicion of potentially fraudulent transactions.

In April, the company asked its top three management personnel – MD and CEO, CFO and COO to proceed on leave without pay. Shockingly, the auditors have pointed out that there is discrepancy in the product pricing , with back dated and unsupported transactions popping up in the books. Where is ethics gone from this world?

Ethics, in simple English means doing what is morally right and if we stretch it further to the corporate world, it means being socially responsible. Thus ethical investing means putting money in companies which are socially responsible, which could embrace anything from being transparent, being environmentally conscious, being labor friendly; basically has very high disclosure norms when it comes to social, environment and corporate governance. Well, if that is the criteria then that leaves us with very little companies to invest in; maybe even less than what can be counted on fingertips.

We have certain community of people who do not invest in liquor, tobacco, leather, poultry, meat stocks as these are all considered to be “sins” as per their religious beliefs. That to some extent is “ethical” as they are doing what they think is morally right. Maybe corporate governance and transparency do not figure out in the list of ideologies. Like they may buy into a fly-by-night company like Austral Coke but not buy Bata. So calling “religious” investors ethical would not be right. Many club it together with “Shariah” stocks but it is not essentially so. In fact Shariah stocks can be a sub set of ethical stocks.