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MCA likely to take final view on Reebok probe report soon

Last Updated: Tuesday, November 5, 2013 - 16:52

New Delhi: With the Law Ministry giving its opinion on the SFIO probe report on alleged financial irregularities at sportswear maker Reebok India, Corporate Affairs Ministry is likely to soon take a final view on the issue.

The Serious Fraud Investigation Office (SFIO) had submitted its final report to the Ministry of Corporate Affairs (MCA) in August.

Later, the Ministry had sought opinion of the Law Ministry on certain aspects of the report.

Sources said the Law Ministry has given its comments on the report and a final decision is likely to be taken soon by Corporate Affairs Minister Sachin Pilot.

The report is said to have found violations by the Indian as well as overseas management personnel at Reebok, sources said.

The case pertains to allegations of financial irregularities at the sportswear major's India operations. In its FIR filed with police last year, Reebok India had alleged financial fraud to the tune of Rs 870 crore at the company.

Reebok India had alleged fraud by its former Managing Director Subhinder Singh Prem and former Chief Financial Officer Vishnu Bhagat. Both of them have denied the charges.

In August, Pilot said the Reebok case had a long investigation and that there are "some substantial findings".

He had also said the SFIO report was quite comprehensive.

According to sources, Adidas, the German parent firm of Reebok, has communicated to the Corporate Affairs Ministry that the global management team of the company acted like a whistleblower in bringing the fraud to light and they should be kept out of any prosecution.

Earlier in August, a Reebok India spokesperson said the company has not seen the SFIO report and therefore cannot comment on it.

"It is important to reiterate that Reebok India Company was the primary victim of the fraudulent activity. In fact, the company originally discovered the fraud and was the whistleblower to the government authorities.

"The company has in the past fully supported the authorities in their investigation and will continue to do so," the spokesperson had said.

Meanwhile, Adidas in March this year had said its balance sheet for 2011 was negatively impacted by 153 million euros on account of commercial irregularities at its arm Reebok India.

First Published: Tuesday, November 5, 2013 - 15:46
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