Reebok fraud: ED to look into money laundering

The Rs 870-crore Reebok scam seems to be drawing attention of multiple investigating agencies as they would be looking into various aspects — from tax evasion to money laundering, while the company is likely to face a dent in its financials. Debobrat Ghose reports.

The Rs 870-crore Reebok scam seems to be drawing attention of multiple investigating agencies as they would be looking into various aspects — from tax evasion to money laundering, while the company is likely to face a dent in its financials.

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Adidas Group — the German parent company of Reebok India — in an email to HT has admitted that the irregularities will likely to have a negative impact on prior year’s consolidated financial statements of the group. “Unfortunately, we discovered commercial irregularities at our Reebok business in India, which will likely affect the prior-year consolidated financial statements of the Adidas Group. In total, we are talking about a negative impact of up to a pre-tax amount of €125 million,” an email reply said.

After the income tax department, now the Enforcement Directorate (ED) is likely to look into money laundering aspect in the scam. While, the Gurgaon police issued ‘look out circular’ against the two top executives of Reebok India, the Ministry of Corporate Affairs has ordered scrutiny of books of the company.