MADE BY KARAN KUKREJA

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COMPANY PROFILE

Founded in England in 1895 as J.W.

Foster and Sons, a manufacturer of track

shoes

Renamed Reebok in 1958.

North American distribution rights

purchased by Paul Fireman in 1979.

Fireman and a few investors bought the

parent company in 1984.

PRODUCT LINE

The product line of a Reebok retail outlet generally consists of sports accessories. The product line is divided into four sections:

1) Shoes

2) Apparels

3) Sports equipment

4) Exercising / health products

5) Personal grooming.

TYPES OF RETAILERS

This Reebok showroom is a specialty store and is a franchisee organization. The products are basically shoes , apparels, sports equipment, health products etc. The horizon of products is very limited, that is, there are only a few types of product.

According to the need of customers, specialty stores are further divided into

1. Single-line stores,

2. Limited-line stores and

3. Super- speciality stores

Related Facts

40 Main Footwear Factories in 8 Countries

600 Apparel Factories in 29 Countries

450 Raw Material Suppliers

27 Freight Forwarders

• Transportation modes include Ship, Truck, Rail and Air

34 Custom Brokers

Over 5,000 purchase orders placed each month

REEBOK SCAM 2012

REEBOK SCAM

Reebok India has alleged a Rs.870 crore fraud

by its former Managing Director

Subhinder Singh Prem and former Chief

Operating Officer Vishnu Bhagat.

Scam came to light in March 2012.

The company's financial director, Shahim

Padath on internal investigation, lodged a

formal complaint against the duo on May 21

at Gurgaon Police station.

Charges by Adidas

-Fudging company a/cs

-Operating secret warehouses

KPMG scanned over 50,000 emails from

1992 under a secret investigation named

“Project Diamond”.

A report was submitted in June 2011,

Probe found that Singh’s expenses were

more than his income.

REPORTS OF KPMG

EMI of Prem Rs 10.79 Lakhs more than his

monthly take home pay of Rs 9.15 lakhs.

• He said he had nine real estate properties in

Delhi/NCR

• KPMG found 3 more properties in his name

which he claimed were jointly owned with

family

COO Vishnu Bhagat had alleged links with

franchisees.

The duo had allegedly rented four warehouses without informing their seniors

and used them to store goods and claimed they were supplied to genuine dealers.

They also reportedly siphoned off goods to

ghost companies and distributors across the country, claiming they were defective pieces.

FIR FILED IN GURGAON

POLICE STATION Irregularities include

over-invoicing to the tune of Rs 147 crore

Running a false franchisee referral

programme, receipts from which were about

Rs 114 crore

Maintaining four secret warehouses where

company goods were diverted, all of which

have been sealed and goods confiscated

Raising fake invoices of about Rs 98 crore to

show higher sales and claim promotions,

bonus and incentives

Mismanagement led to Reebok scam:

Probe teams

Agencies probing the corporate fraud in the

operations of Reebok India have detected a

systemic “mismanagement” in the business

planning and running of the company, allegedly

done by some of its officials and employees.

The three agencies — the income tax (I-T)

department under the finance ministry, the Serious

Fraud Investigation Office (SFIO) under the

Corporate Affairs Ministry and the Economic

Offences Wing of Gurgaon police — have

recorded the findings almost four months after a

criminal case was filed by Reebok India against

two of its former employees.

The governance and operations in the company

were mismanaged. The bills were inflated and not

recorded correctly.

Gurgaon police had arrested Singh and Bhagat

along with three others—Sanjay Mishra, Prashant

Bhatnagar and Surakshit Bhat.

Singh and Bhat were booked for fraud, criminal

conspiracy and other charges under IPC.

IMPACT OF SCAM

Reebok sales declined 26 per cent on a

currency-neutral basis, largely as a

result of negative impacts from Reebok

India Company and the non-recurrence

of prior-year licence sales

Reebok brand’s revenue in the quarter

2011-2012 was at 336 million euro as

against 427 million euro in the year-

2010-2011.

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