Rs 870 crore corporate fraud in the operation of Reebok India have detected a systemic "mismanagement" in the business planning and running of the company reportedly done by some of its officials and employees. "The governance and operations in the company were mismanaged. The bills were inflated and not recorded correctly. So, the probe clearly indicates that it was not a corporate scam in the apparel manufacturing firm but it was non-adherence to the rules and guidelines of business procedures in the firm,” The I-T Dept. which has indicated to an alleged Rs 140 crore tax evasion in the case Reebok India had alleged that its former Managing Director Subhinder Singh Prem and Chief Operating Officer Vishnu Bhagat were involved in a Rs 870-crore fraud by indulging in "criminal conspiracy" and "fraudulent" practices over a period of time. People arrested - former Managing Director Subhinder Singh Prem and Chief Operating Officer Vishnu Bhagat Sanjay Mishra, Prashant Bhatnagar and Surakshit Bhat.
Singh and Bhat were booked for fraud, criminal conspiracy and other charges under IPC for allegedly siphoning off the sportswear company's money by creating ghost distributors across the country and generating forged bills over the last five years.
Adidas Slashes Reebok Targets
Adidas (ADSGn.DE) slashed its 2015 sales target for its struggling Reebok brand to 2 billion euros from 3 billion euros after losing a major American football contract and fraud was discovered at its Indian operation. The German company, the world's second-largest sports apparel company behind Nike (NKE.N), bought Reebok in August 2005 for $3.8 billion. Sales at Reebok slumped 26 percent in the second quarter and annual revenue is expected to fall from 2011's 1.96 billion euros. Its performance contrasts sharply with the rest of the Adidas group, which expects overall sales to rise nearly 10 percent in 2012. Adidas Chief Executive Herbert Hainer has said that Reebok needs to come...