rediff.com

NewsApp (Free)

Read news as it happens
Download NewsApp

Available on  

Rediff News  All News 
Rediff.com  » Business » Reebok's inaction causing delay in probe: SFIO

Reebok's inaction causing delay in probe: SFIO

January 24, 2013 08:42 IST

Officials of the Serious Fraud Investigation Office (SFIO) officials have said Reebok India was causing a delay in its probe against two top former Reebok employees for alleged financial irregularities and fraud.

“We need the audited accounts from the company for 2011 to substantiate our claims in the investigation report. We are mostly through with our probe but are not able to wrap it up because the company has not filed the accounts for the period when most of the irregularity took place,” said an official engaged in the probe.

SFIO, the corporate fraud investigative wing of the ministry of corporate affairs (MCA), started a probe into the Reebok India case in May 2012 and was expected to give its report by October 2012.

However, in the absence of the accounting details from the sportswear maker, SFIO is yet to finalise its report.

“Once we receive the audited accounts from the company, it will take us another 15-20 days to finalise and formulate our report,” said the SFIO official.

Reebok was required to file its audited annual accounts for 2011 by September 30. However, the company twice sought extension of the date from the registrar of companies (RoC), till December 31, 2012, along with permission to submit audited accounts for a period of 15 months — January 2011 to March 2012. It got these permissions.

Despite this, the company has so far failed to meet its latest deadline of December 31.

Adidas, Reebok’s German parent, maintains that it has extended all cooperation to the authorities investigating the case and will continue to do so. Erick Haskell, the recently-appointed head of India operations, said, “There are tremendous volumes of accounts, which is taking time. We will submit the audited accounts to RoC as soon as possible.”

He, however, declined to give a time-frame by when the company is expected to submit the accounts.

The Gurgaon police had filed a chargesheet in the case in November 2012. According to the chargesheet, the total loss incurred by Reebok India on account of alleged financial irregularities is merely Rs 11.30 crore (Rs 113 million) - a very small amount, compared to the Rs 870 crore (Rs 8.7 billion) as alleged by the company in its first information report to the police.

In all, 12 people have been named by the police in the case.

Sushmi Dey and Sounak Mitra in New Delhi
Source: