rediff.com

NewsApp (Free)

Read news as it happens
Download NewsApp

Available on  

Rediff News  All News 
Rediff.com  » Business » Reebok seeks more time from RoC to file accounts

Reebok seeks more time from RoC to file accounts

September 27, 2012 10:26 IST

ReebokIn a new twist to the controversial Reebok India case, the sports wear maker has sought an extension of two months from the Registrar of CompaniesĀ to file its audited financial and accounting details for 2011-12.

"Though usually the accounting is done for a period of 12 months (January-December in case of Reebok India), Reebok has sought permission for the same for a period of 15 months, starting January 1, 2011 to March 31, 2012," a senior government official in the know of developments told Business Standard.

An email query to Reebok India remained unanswered till the time of going to print.

The move is significant, as this may prompt investigating agencies to take a look at the fresh accounting statements to be filed by the company to RoC, before taking a final call.

Subhash Gulati, counsel of Subhinder Singh Prem and Vishnu BhagatĀ -- the former top executives of Reebok India allegedly involved in a fraud of Rs 870 crore (Rs 8.7 billion) in the company -- had earlier said that all the pending return statements concerning the goods in question as of December 31, 2011, which stood at Rs 62.99 crore (Rs 629., were processed and duly reconciled between January and March 2012, whereas the complaint filed with Gurgaon police talks about status only till December 31, 2011.

In a First Information Report, filed with the Gurgaon police on May 21, Adidas AG, the German parent company of Reebok, had accused Prem and Bhagat of 'criminal conspiracy' and 'fraudulent' practices over a period of time that allegedly caused the company a loss of Rs 870 crore.

While various investigating agencies are still probing the case, the Gurgaon Police last Wednesday arrested the two former executives, along with three other persons.

All five are currently in police remand for seven days.

A special investigation team of the Gurgaon police, which is probing the case, has said it has found four illegal warehouses, whose existence was not disclosed to auditors, tax authorities or to the Adidas management in Germany.

The SIT has also alleged that billed goods worth Rs 62 crore (Rs 620 million) were kept in these warehouses but not dispatched.

Besides, the SIT has contended that the group of five accused was involved in fake sales and falsification of accounts since 2005.

According to sources, the Serious Fraud Investigation Office, the investigative wing of the Ministry of Corporate Affairs probing the case, is also in the process of drafting its report and has found falsification and fudging of accounts.

However, with the latest development, now the investigating agency may decide to take more time and also look at the fresh financial statements that Reebok would give to RoC.

Minister of Corporate Affairs M Veerappa Moily, however, said that SFIO is expected to give its report in October.

According to the official, Reebok has told the RoC it could not finalise the statutory audit of its accounts by December because of all these problems that happened due to financial irregularities.

"It has therefore sought an extension and will submit audited accounts for 15 months period by November," he said. Reebok was to submit accounting statements to RoC by September 30.

Sushmi Dey in New Delhi
Source: