Adidas takes Rs 1,090-cr hit due to Reebok India woes
German sportswear giant Adidas today said its balance sheet for 2011 has been hit by €153 million (over Rs 1,090 crore) due to "commercial irregularities" at its arm Reebok India.business Updated: Mar 07, 2013 22:49 IST
German sportswear giant Adidas on Thursday said its balance sheet for 2011 has been hit by €153 million (over Rs 1,090 crore) due to "commercial irregularities" at its arm Reebok India.
The company had in April last year stated that the 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.
The company said it has corrected its consolidated financial statements as on December 31, 2012, in which comparative figures for 2011 are restated.
After discovering financial irregularities at its Indian arm in 2012, Reebok India filed an FIR alleging a Rs 870-crore fraud by its former managing director Subhinder Singh Prem and chief executive officer Vishnu Bhagat. Both of them denied the allegations and investigations are still on.
"The results of these restatements led to a reduction of net income attributable to shareholders of €58 million (around Rs 412 crore) for 2011. In addition, shareholders' equity of the opening balance sheet for 2011 is negatively impacted by €153 million," Adidas said in its official statement.
According to the company's statement, Adidas group reported a 6% increase in group sales to €14.9 billion (Rs 10,586 crore) in 2012, while net cash position stood at €448 million by the year-end.