Reebok’s auditors give co clean chit, say no accounting fraud

Reebok's auditor N Narasimhan & Co has informed the ICAI that there was no accounting wrong doing in the company which has filed Rs 870-crore fraud case against two of its former employees.

"Narsimhan & Co has said they are both the tax auditors and statutory auditors of the firm. They have told us that as far as audit is concerned there is no issue. We are waiting for some trigger from the company," ICAI President Jaydeep Shah said.

The Institute of Chartered Accountants of India (ICAI) had asked from Narsimhan & Co and Reebok's former chief operating officer Vishnu Bhagat, who is also a CA, to give their version and clarification on allegations about their role in the case.


Information was also sought from Rebook India which is still carrying out its internal investigation. Reuters
Information was also sought from Rebook India which is still carrying out its internal investigation, Shah said."The company (Reebok) has said till investigation is going on they will not be able to share anything," he said, adding, "they have given us the report of the FIR that they have filed with the Gurgaon police."

ICAI has sought information from the auditors and the company in order to carry out its own probe into the role of auditors. Shah said the body would wait for the company to complete its probe and give leads. Apart from the ICAI, Corporate Affairs Ministry's fraud probe body SFIO is investigating the case. The I-T department too launched a probe into the finances of Reebok India.

In May, Adidas-owned Reebok India had filed an FIR, alleging that its former Managing Director Subhinder Singh Prem and Chief Operating Officer Vishnu Bhagat were involved in Rs 870-crore fraud by indulging in "criminal conspiracy" and "fraudulent" practices over a period of time.

Both the executives, however, had denied the allegations. Following this, the Ministry of Corporate Affairs (MCA) had ordered a scrutiny of the books of accounts of the sportswear maker Reebok's Indian arm by the Registrar of Companies. The case was later handed over to the SFIO.