Reebok refuses to share ‘fraud’ details with ICAI


Reebok refuses to share ‘fraud’ details with ICAI

12 Jul 2012

Reebok India has declined to share any information on the alleged

Rs 870 crores fraud in the company with Institute of Chartered Accountants of India (ICAI). On May 23, ICAI had written to Reebok India, seeking certain documents and clarifications on the case after the sports goods maker’s German parent Adidas AG lodged a first information report (FIR) with the Gurgaon police, alleging a fraud in its Indian subsidiary.

Reebok India has told ICAI that since internal investigations on the alleged scam were underway it cannot furnish the required details. Earlier, minister for corporate affairs Veerappa Moily had also pointed out that Reebok wasn’t cooperating in the investigation on the alleged commercial irregularities against it. He had added the company had not given some important documents sought during his ministry’s initial inquiry. This had prompted the ministry to forward the case to the Serious Fraud Investigation Office (SFIO) on May 29.

ICAI had also written to Reebok India’s auditor, N Narasimhan & Co, and the company’s former chief operating officer, Vishnu Bhagat, one of the accused in the alleged fraud. It had sought various details, including whether the company had an internal auditor or a statutory one. ICAI, in a letter to the two on May 29, had asked them to reply within 14 days. To which, N Narasimhan & Co sent a a reply refusing any negligence or lapses in the company’s audit.

In the FIR, filed on May 21, Adidas AG had accused two former executives — former managing director Subhinder Singh Prem and Bhagat — of “criminal conspiracy” and “fraudulent” practices over a period of time. The lawyers of the two accused have denied their clients involvement in the said fraud.