Gurgaon: Reebok India’s sacked managing director (MD) Subhinder Singh Prem and former chief operating officer (COO) Vishnu Bhagat were arrested on Wednesday along with three others for their alleged involvement in a Rs.870 crore fraud in the company.
Deputy commissioner of police, Gurgaon (east), Maheshwar Dayal confirmed that Prem and Bhagat along with three other company officials—Sanjay Mishra, Prashant Bhatnagar, and Surakshit Bhatt—have been arrested on Wednesday evening also indicating that there is a “high probability” of more arrests to come in the near future. “There is high probability of more arrests within the company,” said Dayal, not divulging further details.
“They have been booked under Section 420, 406, 468, 467, 471 and 120B for falsification of records, diversion of funds, causing loss to the company and wrongful gain,” said Dayal for the five arrested last evening.
“They will be produced in a district court in Gurgaon today (on Thursday) and we would ask to keep them in custody for the next 10 days.” added Dayal.
The arrest is based on documentary evidence found against these officials. “We have found transaction records of the last three years, cyber forensics of their laptops, various bank account statements among other evidence,” added Dayal.
Prem and Bhagat have been booked for fraud, criminal conspiracy and other charges under the Indian Penal Code for allegedly siphoning off the sportswear maker company’s money by creating ghost distributors across the country and generating forged bills over the last five years.
When the alleged scam came to light in March 2012, Prem, who had been made MD of Adidas India last year as part of an integration of the businesses of both brands, was dismissed from the company. Bhagat’s services were terminated, too.
The company’s financial director, Shahim Padath, later lodged a formal complaint against the two.
The economic cell of the Gurgaon police conducted a probe and found that Prem and Bhagat had allegedly rented four warehouses without informing their seniors and used these to store goods and claimed they were supplied to genuine dealers. They also allegedly siphoned off goods to ghost companies and distributors across the country, claiming they were defective pieces.
On the complaint of Padath, an first information report was lodged against them. Prem and Bhagat have denied the charges.