M A I N   N E W S

Adidas charges two ex-heads with fraud
Sunit Dhawan/TNS

Gurgaon, May 23
In a case of huge corporate fraud, a former managing director and a chief financial officer-cum-chief operating officer of Reebok India allegedly defrauded Reebok and its parent company Adidas of hundreds of crores of rupees.

Shahin Padath, director (finance) of Reebok India, has lodged a complaint with the Gurgaon police alleging that the company’s former India managing director Subhinder Singh Prem and former chief operating officer Vishnu Bhagat had caused losses amounting to Rs 870 crore to the companies.

In the FIR, Padath asserts that the company would incur a restructuring cost of Rs 487 crore in order to “remedy the consequences of the criminal conspiracy on their business” and “maintain the financial viability of the same”.

This assessment puts the total losses caused to the companies at Rs 1,357 crore. The company has claimed that jobs and livelihood of around 40,000 persons has been put at risk due to the fraudulent acts of its former top-shots.

Prem and Bhagat have been booked]of the IPC. 

According to the FIR, Prem and Bhagat had been working at the company for nearly 16 years.  They were shown the door on March 26 after their alleged fraudulent activities were detected in January and investigated internally by two directors of the company for  three months.

The company’s investigation revealed that both “had been indulging in such fraudulent activities over several years and were engaged in a grave criminal conspiracy to  systematically cheat and defraud the company of hundreds of crores  of rupees”.

The report further alleges that these two former senior company officers maintained four illegal warehouses in Delhi and diverted the products of the company to these warehouses for personal gains.

The FIR alleges that around Rs 114 crore were collected through an unauthorised franchise referral programme. The money was collected despite instructions from the Adidas headquarters against expanding the number of stores in the country.

Prem and Bhagat have also been accused of maintaining “parallel account books”, known as regional outstanding reports, and indulged in financial irregularities to the tune of Rs 530 crore. The report further says that through “fraudulent manipulations” both the senior functionaries induced the Adidas group to give them promotions.

Interestingly, former Reebok India MD Subhinder Singh Prem even sued the company for defamation and abrupt termination of services and has demanded Rs 15 crore as compensation.

Meanwhile, the Gurgaon Police has constituted a special investigation team (SIT) headed by ACP (Crime) Rajesh Phogat to probe into the matter. DCP (Gurgaon-East) Maheshwar Dayal said the economic offences wing and the cyber crime cell of the police had also been directed to assist the SIT. 





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