The chartered accountants’ institute has launched an enquiry into Reebok India’s former Chief Financial Officer Vishnu Bhagat’s role in the alleged multi-crore fraud in the Indian unit of the 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, President, Institute of Chartered Accountants of India, said.
Agrawal said the CA institute was not currently looking at the role of the firm that had undertaken the statutory audit of Reebok India. It was only enquiring into the actions of the individual member (ex-CFO), he added.
The institute had earlier written a “strong letter” to Bhagat warning him that an
Bhagat had sought time till March 31 to respond to the show-cause notice issued to him by the institute.
Reebok had in May last year lodged a first-information report with the 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 cases up to 2006, the Disciplinary Committee has completed hearing of almost all cases, Agrawal said.
At the time of his assuming charge in February, there were 83 pending cases that existed prior to 2006.
“Most of these have been heard. There are now only four-five pending cases and these are before the courts.”
The CA institute will wait for bankers to take action against the statutory auditor concerned or chartered accountant members 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.
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.