Reebok India’s sacked managing director Subhinder Singh Prem owns 20 residential and commercial premium properties, while former COO of the sportswear maker Vishnu Bhagat has eight such properties in various cities across the country, Ernst & Young (E&Y) has revealed in its latest findings.
The auditor firm also said that Prem’s savings bank account with Standard Chartered had unidentified transactions of R5.58 crore between April 2010 and May 2012 and Bhagat’s account had similar transactions of R2.24 crore in the same period.
Prem, 44, owns 20 properties in cities such as Gurgaon, Manesar, Jaipur, Mohali, Noida, and Bhopal. Bhagat, 42, possesses properties in Gurgaon, Faridabad, Mohali and Bangalore.
Ernst & Young, which is conducting a forensic investigation into the alleged R870-crore fraud that hit Reebok India early this year, has also zeroed in on five secret warehouses being run by the two accused.
Sources say that that the findings by the E&Y are just a tip of the iceberg as the unidentified income of Prem and Bhagat is related to just one bank account. The accused had accounts in Citibank, Axis Bank and ICICI Bank also, which are yet to be investigated.
As per the 66-page E&Y report, the five secret warehouses, started to function in October 2009, were used to stock material billed but not delivered to the customers or franchisees.
Reebok India would also pay rent to the so-called owners of these warehouses and total rent paid was amounted at around R1.4 crore.
Adidas AG Germany had hired E&Y in June for performing a forensic review on allegations mentioned in the FIR against Prem and Bhagat, after the Gurgaon police booked the duo on May 21. Reebok India is a subsidiary of Adidas AG.
Reebok had filed an E&Y report with the special investigation team (SIT) of Gurgaon police early this month. The duo along with three more employees were arrested on September 21 and have been lodged in Gurgaon jail since then. The allegations in the FIR included maintenance of parallel books of accounts, products billed to customers but not displayed, maintenance of secret warehouses, manipulation of books of accounts and others.
Prem, a resident of Greater Kailash, Delhi earned a monthly salary of R20 lakh while Greenwood City (Gurgaon) resident Bhagat bagged R10 lakh a month.
Blaming the city police for shoddy investigation, Reebok India had urged the Haryana director general of police, RS Dalal, to transfer the case to an independent agency. In a letter to the DGP, a copy of which HT has, the multi-national firm has stated that the investigation team was acting under the influence of persons with vested interests in the case.