Ministry orders probe into alleged fraud of Rs 870 cr in Reebok India

Posted By: Religare
Subscribe to GoodReturns

Ministry orders probe into alleged fraud of in Reebok India
The Corporate Affairs Ministry has ordered a scrutiny of the books of leading sports goods maker Reebok India, after the company filed a criminal complaint against two of its former top executives for fraud of around Rs 870 crore.

"We have ordered an enquiry under Sec. 234 of the Companies Act, which is a non-invasive scrutiny. The Registrar of Companies (RoC) has been asked to submit its report in three days. Based on the report, we will order further scrutiny," a media report quoted an MCA official as saying.

The matter came to the light when the parent company, Adidas, earlier this month aired that it found commercial irregularities to the tune of 125 million euros in its subsidiary Reebok India, following which former MD Subhinder Singh Prem and its COO Vishnu Bhagat were sacked. Adidas also announced plans to close one- third of around 900 Reebok stores as part of a restructuring strategy at a cost of around Rs 495 crore.

Though Reebok India has filed compliant against only two top executives as of yet, but experts have said that more employees could be involved into the matter. Gurgaon police has already started investigating the matter with a special team, just to uncover the reality of the case which if proves to be a fraud of Rs 870 crore, would bring back the memories of weak corporate governance in India that had earlier inspired a Satyam Scam.

Dion Global Solutions

Read more about: sensex, reebok
Story first published: Thursday, May 24, 2012, 23:41 [IST]
Please Wait while comments are loading...
Company Search
Enter the first few characters of the company's name or the NSE symbol or BSE code and click 'Go'