The government, on Monday, said it would be up to corporate fraud probe body SFIO (Serious Fraud Investigation Office) to investigate the role played by global audit firm KPMG in the alleged Rs.870-crore fraud in Reebok India by its two former top executives.
“We have given Reebok (India) as a company to the SFIO. Now it's up to them to look into all the aspects,” Corporate Affairs Minister Veerappa Moily told reporters here.
The Minister was responding to a query on whether the SFIO would look into the role of audit firm KPMG, which did a forensic audit of Reebok India on behalf of its German parent Adidas in 2010.
Official sources, however, said even if the audit firm KPMG's role was not probed per se but their forensic audit report of 2010 might be asked for as part of the ongoing investigation in the fraud case.
Mr. Moily said that during the initial investigation into the case by the Registrar of Companies, Reebok India was not co-operative.
“Prima facie, we found some problems because of which we referred it to the SFIO,” he added.
SFIO probe
Last month, Adidas-owned Reebok India had filed an FIR, alleging that its former Managing Director Subhinder Singh Prem and Chief Operating Officer Vishnu Bhagat were involved in the Rs.870-crore fraud by indulging in ‘criminal conspiracy' and ‘fraudulent' practices over a period.
Both executives, however, had denied the allegations.
Following this, the Ministry of Corporate Affairs (MCA) had ordered a scrutiny of the books of accounts of the sportswear maker Reebok's Indian arm by the Registrar of Companies.
Later, the case was referred to the SFIO, the investigation wing of the Ministry of Corporate Affairs, and was given four months time to complete the probe.
The IT Department, too, launched a probe into the finances of Reebok India.
The Serious Fraud Investigation Office has started scrutinising documents relating to alleged Rs.870-crore fraud involving Reebok India and might soon take a call on questioning senior officials of the sportswear maker.
