I-T begins scrutiny of Reebok accounts
New Delhi: The Income Tax department has begun scrutiny of financial documents and transactions of global sportswear manufacturer Reebok after its owner Adidas recently announced commercial irregularities in its India operations.
The I-T department has collected documents related to sales and purchase made by the firm during the last financial year and few others, including trade receipts processed by the company.
"Certain government/regulatory bodies were seeking clarifications about Reebok India Company in regards to the announcement made on Monday (May 2). We have shared the required details with them," the Adidas group said in a statement.
The I-T authorities, who visited the corporate office of the firm in Gurgaon few days back to obtain certain documents, are also scrutinising TDS payments made by the company, sources said.
On May 2, German sportswear maker Adidas had said it found some commercial irregularities to the tune of 125 million euro in Reebok India.
The details of the irregularities have not yet been disclosed.
Adidas is also in the process of restructuring Reebok India's business which might cost the company 70 million euro.
As a part of the restructuring the group might shut down one-third of its 900 Reebok stores in India.
"The implementation of new commercial initiatives and terms could result in a reduction of our Reebok franchise store base by about one-third, as we focus on maximising our future returns in the market," Adidas Group CEO Herbert Hainer had said earlier.
I-T sources said during the course of investigations, they may summon the officials and accountants of the firm for explaining transactions to them.