Former Reebok CFO may face action : ICAI

Accounting watchdog ICAI today said strict action could be taken against Reebok India's former Chief Financial Officer Vishnu Bhagat if he fails to respond to the show-cause notice regarding the alleged fraud at the sportswear maker.

The Institute of Chartered Accountants of India had issued show-cause notice to Bhagat, who sought time till March 31 to give his response. But ICAI is yet to receive any response. "He had sought time till March 31. We have not got the information," ICAI President Subodh Kumar Agrawal said here.

Also read: PepsiCo is exclusive beverage partner for 8 IPL teams

"We have sent a very strong letter to Vishnu Bhagat saying that if we do not get the information within a stipulated time, ex-parte decision may be taken," he added.

The issue relates to alleged Rs 870 crore financial fraud at Reebok India last year. In February this year, Agrawal had said that action would be taken depending on the written response from the former CFO.

Reebok India last year had filed an FIR alleging fraud by its former Managing Director Subhinder Singh Prem and Bhagat. Both of them have denied the charges.

Last month, German sportswear giant Adidas had said its balance sheet for 2011 is negatively impacted by euro 153 million (over Rs 1,090 crore) due to "commercial irregularities" at its arm Reebok India Co.
    
The company had in April last year stated that estimated maximum negative impact due to the alleged fraud by its two top executives at Reebok India, could be up to a pre-tax amount of 125 million euros.