Investigators hint at link between Reebok scam and Citibank fraud

Sanjeev K Ahuja

Gurgaon, Nov. 3 -- In an interesting twist to the Reebok India fraud case, investigators have hinted at a possible link between the Rs. 870-crore scam and the Citibank fraud case. According to sources, Enforcement Directorate (ED) officials have traced accounts in the name of former Reebok India MD Subhinder Singh Prem in Citibank.

The ED officials shared these preliminary findings with the Gurgaon police following which the latter deferred its decision to file the chargesheet in the case.

Prem, along with former Reebok India COO Vishnu Bhagat, is currently lodged at the Bhondsi jail for his alleged involvement in the scam.

Sources said a Serious Fraud Investigation Office (SFIO) team interrogated Prem, Bhagat and another accused for three days in the prison.

The ED, which investigates foreign exchange violations and money laundering issues, is learnt to have zeroed in on a dozen bank accounts of the prime accused and their relatives in Citibank.

The ED officials have sought information on the number of accounts Prem and Bhagat held in Citibank and the nature of transactions that took place between 2009 and 2012.

Recently, audit firm Ernst & Young (E&Y) had spotted unidentified transactions to the tune of R5.58 crore in the Standard Chartered bank accounts of Prem between April 2010 and May 2012.The chargesheet in the case was to be filed earlier this week.

"But after ED's findings, the Gurgaon police would be required to include additional findings related to the monetary transactions of Prem and Bhagat done through Citibank.

A few more hundred pages might be added to the 12,000-page chargesheet," said a source.According to sources, ED has identified a number of Citibank accounts of Prem and his relatives and these accounts carry "unusual" transactions between 2009 and 2012. This is the same period in which the Citibank fraud came to light.

On October 30, a Gurgaon court had granted SFIO permission to investigate the accused in the Reebok case.

Prem and Bhagat have been booked for fraud, criminal conspiracy and other charges under the Indian Penal Code for allegedly siphoning off the sportswear maker company's money by creating ghost distributors across the country and generating forged bills over the past five years.

Published by HT Syndication with permission from Hindustan Times.