Reebok India’s former MD, COO arrested in fraud case

Finally, former MD of Reebok India Subhender Singh Prem

and ex-COO Vishnu Bhagat along with five other executives were arrested last evening for allegedly causing losses to the tune of Rs 870 crores to the company. The arrests were made by the Special Investigation Team (SIT) of Gurgaon Police. On May 22, 2012, the Gurgaon Police had lodged an FIR against Prem and Bhagat, whose services were terminated by the company. The two were accused by parent company Adidas, of selling products but not depositing the recovered money in the company account.

Three other accused arrested earlier during the day included company’s executives Surakshit Bhatt, Sanjeev Mishra and Prashant Bhatnagar. After Adidas accused Prem and Bhagat of causing tremendous losses to the company, an FIR was lodged against both for forgery, cheating, criminal conspiracy and criminal breach of trust on the recommendation of the police's economic offences wing (EOW). The company, in its complaint filed with police, had said an internal inquiry established that the duo had been indulging in fraudulent activities over several years and were involved in cheating and defrauding the company of hundreds of crores of rupees.

On the other hand, Prem and Bhagat had claimed that they were asked to “carry out certain illegal and unethical actions” by the Adidas Group, such as manipulating accounts, booking irrelevant expenses and cancelling large distributorships, to ensure that the market value of Reebok India falls, ‘so that a significantly lower amount becomes payable to the exiting Indian joint venture partner’.