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Deploying extra resources to settle franchisees' dues: Reebok

business Updated: Jul 27, 2012 15:41 IST
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Reebok India on Friday said it is deploying additional resources to 'reconcile customer accounts' even as about 80 of its franchisees have written to the CEO of the parent company Adidas seeking his intervention.

The company, which had filed an FIR against its two former executives alleging fraud of Rs 870 crore, said it is
taking longer than usual time to reconcile customer accounts due to the ongoing investigations.

"We are pro-actively deploying additional resources to address the concerns and expedite the resolution," Reebok
India Company told PTI in an email response without elaborating details.

The company said authorities are carrying out thorough investigation into the fraud allegations against its former
managing director Subhinder Singh Prem and chief operating officer Vishnu Bhagat across various dimensions, which also includes its own customers.

"Hence it is taking longer than usual to reconcile customer accounts," it added.

When asked about the letter sent by nearly 80 franchisees from the National Capital expressing their insecurity due to lack of clarity from the company about its future operations in India, Reebok India declined to address the issue directly.

"The content of the letter you are referring to has come to us via email through an anonymous source. It is not
undersigned by any of the authorised Reebok India Company franchisee and hence it is difficult to ascertain the
credibility," it added.

In a letter addressed to Adidas Group CEO Herbert Hainer on July 23, the franchisees sought his intervention regarding handling of the situation by the new management in India.

"For the last 4 months, company has not supplied any fresh products/stocks to us wherein our sales have suffered
drastically. We do not understand this strategy because under the MG arrangements, the company is also incurring losses in this approach," the letter said.

They also said the company has not taken them into confidence while planning to initiate a new business model.

"There are cases where some stores, which were closed earlier and their accounts and settlements have been finalised
and yet the company has not paid our dues saying it has no funds," the franchisees said.

The franchisees alleged ill-treatment by the company when they visited the India headquarter of Reebok in Gurgaon.

They further said, "At retail level, we the retailers are facing annoying questions from the landlords/mall managements for not receiving their rent/dues from Reebok India on time, which in return causes humiliation at retail front."

Currently, Serious Fraud Investigation Office and the Income Tax Department are probing the alleged financial
irregularities in Reebok India Company.