Reebok India’s sacked managing director Subhinder Singh Prem and former COO Vishnu Bhagat had fudged company accounts books by double discounting and preparing fake invoices, said Ernst & Young (E&Y) in the forensic analysis report on the company’s accounts.

E&Y has given the report to the Gurgaon police. “This is important forensic evidence. We are going through the report. We will use every piece of evidence that is available against the accused,” said Maheshwar Dayal, deputy commissioner of police, heading the special investigation team (SIT) investigating the case.

Prem and Bhagat, with 10 other accused, are in judicial custody till October 16. The police are expected to question them on the basis of the report.

On September 26, the police arrested Prem and Bhagat for their alleged involvement in the Rs 870-crore fraud. Three more people — Sanjay Mishra, Prashant Bhatnagar and Surakshit Bhatt — were arrested on the same day on charges of helping the two accused carry out the alleged fraud. The next day, the five were sent to police remand for seven days, later extended by six more days. The Gurgaon police made seven more arrests — Surakshit Bhatt, Nikhil Upadhay, Anand Aggarwal, Lalit Marwah, Vikas Uppal, Manish Marwah, and Kapil Aggarwal — who were managers at the company.

According to sources, the judicial custody for all the 12 arrested is likely to be extended by at least two more weeks.

A source close to Prem and Bhagat said none of the accused had sought bail. “They are unlikely to seek bail soon. All legal options are being considered, but the next course of action is yet to be finalised,” said the source. Prem and his associates are helping in investigation, the source added. According to another source close to Prem, the SIT has not involved the company management so far. “They should question both the parties,” he said. “Reebok India Company has and will continue to cooperate with the investigation authorities and we are not in a position to comment on the progress of the investigation,” the company said in e-mailed response.

The Serious Fraud Investigation Office (SFIO) probing the alleged irregularities at Reebok India is likely to submit its report by November as the sportswear maker is still finalising its accounts. SFIO, which is under the corporate affairs ministry, is looking at the financial deals of the company over a period of time. (Business Standard)