rediff.com

NewsApp (Free)

Read news as it happens
Download NewsApp

Available on  

Rediff News  All News 
Rediff.com  » Business » Reebok's ex-MD, COO among five arrested for fraud

Reebok's ex-MD, COO among five arrested for fraud

September 20, 2012 10:06 IST
Reebok India's sacked MD and former COO Vishnu Bhagat were on Wednesday arrested along with three others for their alleged involvement in Rs 870-crore (Rs 8.7 billion) fraud in the company.

Singh, Prem and three others, Sanjay Mishra, Prashant Bhatnagar and Surakshit Bhatt, have been arrested and will be produced in court on Thursday.

"We will seek their custody," said Assistant Commissioner of Police Bhupinder Singh, who heads the special investigation team probing the case.Prem and Bhagat were booked for fraud, criminal conspiracy and other charges under the IPC for allegedly siphoning the sportswear company's money by creating ghost distributors across the country and generating forged bills over five years.

When the alleged scam came to light in March 2012, Prem, who had been made the managing director of Adidas India last year as 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 Prem 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 goods to ghost companies and distributors across the country, claiming they were defective pieces.

On the complaint of Shahim, an FIR was lodged against them. Prem and Bhagat have denied the charges. Sources close to Prem say for the past two days Prem and Bhagat had been visiting the SIT to help in the investigation.

The case was handed to the Serious Fraud Investigation Office, which investigated the alleged fraud in the company. The SFIO is expected to come out with its interim report in a few weeks.

BS Reporter in New Delhi/Gurgaon
Source: