Reebok alleges Rs 8,700 cr fraud by ex-MD, COO

CNN-IBN | 23-May 08:07 AM

New Delhi: In what could be the second biggest corporate scandal after Satyam, Reebok India has alleged a Rs 8,700 crore fraud by its former Managing Director Subhinder Singh Prem and former Chief Operating Officer Vishnu Bhagat.

Reebok lodged an FIR with the Gurgaon police alleging that Prem and Bhagat had 'stolen' products by setting up 'secret warehouses', fudged accounts and indulged in fictitious sales to cause a multi-crore dent to the company.

When the alleged scam came to light in March 2012, Singh, who had been made the Managing Director of Adidas India in 2011 as a part of an integration of the businesses of both Adidas and Reebok brands, was dismissed from the company. Bhagat's services were terminated too.

The company's financial director, Shahim Padath, later lodged a formal complaint against the duo. The economic cell of Gurgaon police conducted a probe and found that Singh and Bhagat had allegedly rented four warehouses without informing their seniors and used them to store goods and claimed they were supplied to genuine dealers.

They also allegedly siphoned off goods to ghost companies and distributors across the country, claiming they were defective pieces.

In its statement, Adidas Group said, "We are given to understand that our criminal complaint has been registered for investigation by the Indian law enforcement authorities. Please understand that we cannot provide any further details since the matter now rests with the Indian law enforcement authorities. We shall continue to cooperate with the authorities in their investigation of the matter."

(With additional information from PTI)

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