The CA Institute has launched an enquiry against Reebok India’s former Chief Financial Officer Vishnu Bhagat over his role in the alleged multi-crore fraud in the Indian unit of global sportswear major.
“We have initiated an enquiry on our member… who was a key managerial person (CFO) in that company (Reebok India)”, Subodh Agrawal, ICAI President, said.
Agrawal said that the institute was not looking at the role of the statutory auditor of Reebok India, but was only enquiring into the actions of the individual member (ex-CFO).
It had earlier written a “strong letter” to Vishnu Bhagat warning him that an ex-parte decision may be taken against him if he does not furnish the relevant information sought from him.
Bhagat had earlier sought time till March 31 to respond to the show-cause notice issued to him by the CA Institute. But no response had come on this matter, it is learnt.
Reebok had in May last year lodged a FIR with Gurgaon police alleging that its former Managing Director Subhinder Singh Prem and Chief Financial Officer Vishnu Bhagat had stolen products by setting up secret warehouses and fudged accounts, leading to huge loss for the Indian unit.
Disciplinary committee
As for disciplinary cases up to 2006, the Disciplinary Committee has completed the hearing of almost all cases, Subodh Agrawal said.
At the time of his assuming charge in February, there were 83 pending cases that needed to be dealt with under the disciplinary framework that existed prior to 2006.
“Most of them have been heard. There are now only 4-5 cases pending and they are before the Supreme Court/High Court/ or local court.”
The CA Institute will wait for the bankers to take action against the statutory auditor or chartered accountant members concerned before going ahead with its probe.
“We have been told that the banks will soon formally lodge a complaint against the auditor. Based on that we will initiate disciplinary action against our member,’’ Agrawal said.
Deccan Chronicle case
The CA Institute had earlier written to the lenders of Deccan Chronicle Holdings Ltd seeking “relevant information” about its accounts.
This was a suo-motu action initiated by the CA Institute based on available public information.