Deploying extra resources to settle franchisees’ dues: Reebok

PTI New Delhi | Updated on July 27, 2012


Reebok India today said it is deploying additional resources to ‘reconcile customer accounts’ even as about 80 of its franchisees have written to the CEO of the parent company Adidas seeking his intervention.

The company, which had filed an FIR against its two former executives alleging fraud of Rs 870 crore, said it is taking longer than usual time to reconcile customer accounts due to the ongoing investigations.

“We are proactively deploying additional resources to address the concerns and expedite the resolution,” Reebok India Company told PTI in an email response without elaborating details.

The company said authorities are carrying out thorough investigation into the fraud allegations against its former Managing Director Mr Subhinder Singh Prem, and Chief Operating Officer Mr Vishnu Bhagat across various dimensions, which also includes its own customers.

“Hence, it is taking longer than usual to reconcile customer accounts,” it added.

Asked about the letter sent by nearly 80 franchisees from the National Capital expressing their insecurity due to lack of clarity from the company about its future operations in India, Reebok India declined to address the issue directly.

“The content of the letter you are referring to has come to us via email through an anonymous source. It is not undersigned by any of the authorised Reebok India Company franchisee and, hence, it is difficult to ascertain the credibility,” it added.

In a letter addressed to the Adidas Group CEO, Mr Herbert Hainer, on July 23, the franchisees sought his intervention regarding handling of the situation by the new management in India.

“For the last four months, the company has not supplied any fresh products/stocks to us wherein our sales have suffered drastically. We do not understand this strategy because under the MG arrangements, the company is also incurring losses in this approach,” the letter said.

They also said the company has not taken them into confidence while planning to initiate a new business model.

“There are cases where some stores, which were closed earlier and their accounts and settlements have been finalised and yet the company has not paid our dues saying it has no funds,” the franchisees said.

The franchisees alleged ill-treatment by the company when they visited the India headquarter of Reebok in Gurgaon.

They further said: “At retail level, we the retailers are facing annoying questions from the landlords/mall managements for not receiving their rent/dues from Reebok India on time, which in return causes humiliation at retail front.”.

Currently, Serious Fraud Investigation Office and the Income Tax Department are probing the alleged financial irregularities in Reebok India Company.

Published on July 27, 2012

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