Reebok India had filed an FIR alleging fraud by its former managing director Subhinder Singh Prem and Bhagat. Both of them have denied the charges
The Institute of Chartered Accountants of India (ICAI) has issued a show-cause notice to Reebok India’s former chief financial officer Vishnu Bhagat regarding the alleged Rs870 crore fraud at the sportswear manufacturer last year.
“We have issued show-cause notice to Reebok’s former CFO Vishnu Bhagat and he has sought time till 31 March 2013 (to reply),” ICAI president Subodh Kumar Agrawal said in Delhi yesterday.
“From what information the (former) CFO gives, the written information, then if we find there is a case against the auditor... Then (we will take action),” Agrawal said.
The external auditor for Reebok is N Narasimhan & Co, he added.
Earlier, Reebok India had filed an FIR alleging fraud by its former managing director Subhinder Singh Prem and Bhagat. Both of them have denied the charges.
“If there is some failure and we find that the auditor did not work diligently, then we take action against them,” he added.
He also stressed that ICAI has taken action against auditors in the Satyam fraud case.
The bankers, who in Mumbai on Tuesday, said they had given the airline sufficient time for a fresh equity injection, but there was no headway. Meanwhile, a top banking official said the value of the Kingfisher brand and the personal guarantee of Mr Mallya was more than the exposure
A consortium of banks, which has lent nearly Rs7,000 crore to Vijay Mallya-led Kingfisher Airlines, is considering recalling the loans. The lenders, led by State Bank of India (SBI), are reportedly meeting today to draw up an action plan.
The bankers, who met the airline’s management in Mumbai on Tuesday, said they had given the airline sufficient time for a fresh equity injection. But there was no headway. Meanwhile, SBI deputy managing director Shyamal Acharya said the value of the Kingfisher brand and the personal guarantee of Mr Mallya was more than the exposure.
On the other hand, the Kingfisher management said the airline would wait for an official communication from the banks before finalizing its move.
The debt-laden airline has been grounded since October 2012 after its licence was suspended by the Directorate General of Civil Aviation (DGCA) and a strike by its employees due to overdue salaries. The airline’s license expired on 31st December after the government refused to renew it.
A loan recall means that the borrower has to repay loans immediately. However, a top-level official of a large public sector bank said the recovery process would not be easy and would take time. Most banks have already classified KFA loans as non-performing assets and made provisions for the account.
Hopefully, with the advent of the new company law, presuming the Bill becomes an Act, there...