Reebok fraud case: E&Y forensic report confirms falsification

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Reebok India’s sacked managing director Subhinder Singh Prem and former COO Vishnu Bhagat had indulged in fudging of accounts books, double discounting and preparing fake invoices, said Ernst & Young (E&Y) in the forensic analysis report on the company’s accounts.

E&Y has already submitted the report to the Gurgaon Police. “This is important forensic evidence; we are in the process of going through the report. We will use every piece of evidence that is available against the accused,” said Maheshwar Dayal, deputy commissioner of police (DCP), who is heading the special investigation team (SIT) set up by the police.

Prem and Bhagat,  alongwith 10 more accused, are in judicial custody till October 16 and the police are expected to question them on the basis of the report.

On September 26, Police arrested Prem, Bhagat and three more in their alleged involvement in Rs 870-crore case. Sanjay Mishra, Prashant Bhatnagar and Surakshit Bhatt were also arrested on the same day on charges of helping the two accused carry out of the alleged fraud. The next day, all five accused were sent to police remand for seven days that was later extended by six more days. The Gurgaon police have arrested seven more accused — Surakshit Bhatt, Nikhil Upadhay, Anand Aggarwal, Lalit Marwah, Vikas Uppal, Manish Marwah, and Kapil Aggarwal who were managers at the company.

Meanwhile, sources said that the judicial custody for all the 12 arrested is expected to increase by atleast two more weeks.

A source close to Prem and Bhagat had said that none of the accused has sought bail. “They are unlikely to seek bail soon. All legal options are being considered, but the next course of action is yet to be finalised,” said the source. Prem and his associates are helping in investigation, the source added.

According to a different source close to Prem, the investigation authority should ask both the parties. But, the authorities have not involved the company management so far, pointed out the source.
The Serious Fraud Investigation Office (SFIO), probing the alleged irregularities at Reebok India, is likely to submit its report by November as the sportswear maker is still finalising its accounts. SFIO, under the Corporate Affairs Ministry, is looking at the alleged Rs 870-crore financial scam at the company over a period of time.