Number trouble

Gurgaon, May 23: A special investigation team, headed by an assistant commissioner of police, has been formed to probe Reebok India’s charge against its former managing director Subhinder Singh Prem and former chief operating officer Vishnu Bhagat for conspiring to defraud the footwear giant of Rs 870 crore.

“The team will look into financial irregularities and might take help of independent auditors and chartered accountants to complete their probe,” a senior police officer of Gurgaon Police said.

Reebok India had filed a first information report against the two top executives who were forced out of the company last month in a blaze of controversy.

German sportswear and equipment maker Adidas AG, which owns the Reebok brand, filed a case of fraud, cheating and theft.

Reebok and Adidas operated independently in India until 2011. Prem, who had headed Reebok till then, was appointed managing director of the combined entity that year, while Bhagat who used to handle finance, remained with Reebok but as the COO of the firm.

Adidas claims that it found out in internal investigations that Prem and Bhagat stole merchandise amounting to Rs 62.99 crore as on December 31, 2011.

Because of a goof-up by a police officer, Gurgaon Police had estimated the scale of the fraud at Rs 8,700 crore — 10 times the actual loss. Today, the police rectified the mistake. Sources said the officer who typed the FIR had since been suspended.

The criminal complaint, filed by Adidas, claims the two accused diverted the company’s products to secret warehouses and recorded them as fake sales.