May 23, 2012

Reebok alleges Rs 8,700 Cr Fraud by former MD, COO

Reebok India has alleged a massive Rs 8,700 crore fraud by its former Managing Director Subhinder Singh Prem and former Chief Operating Officer Vishnu Bhagat. It could be said as the second biggest corporate scam after Satyam.

The scandal hit the headline when Reebok lodged an FIR with the Gurgaon police against Prem and Bhagat. They were accused of stealing products by setting up 'secret warehouses', fudged accounts and indulged in fictitious sales to cause a multi-crore dent to the company.

Later, the company’s financial director, Shahim Padath, lodged a written complaint alleging the duo for shipping off the company’s money and forging the bills in the last five years.

He alleged that the duo had caused a loss of Rs 1,300 crore to the company through various means.

The economic cell of Gurgaon police 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 are accused of shipping off good to ghost companies and distributors across the country.

The scam came to light in March 2012 when Subhinder Singh was appointed as the MD of Adidas India in 2011 as part of an integration of the businesses of both Adidas and Reebok. Later, he was dismissed from the company along with Bhagat.

The company also alleged that the jobs of around 40,000 employees involved directly and indirectly in Reebok and Adidas in India were put at risk due to such fraudulent act by the duo.

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