Companies & Sectors
Reebok says deploying extra resources to settle franchisees' dues

Reebok said it is taking longer than usual time to reconcile customer accounts due to the ongoing investigations even as the franchisees are seeking intervention from Adidas CEO


New Delhi: Reebok India on Friday said it is deploying additional resources to 'reconcile customer accounts' even as about 80 of its franchisees have written to the chief executive (CEO) of the parent company Adidas seeking his intervention, reports PTI.
 
The company, which had filed a first information report (FIR) against its two former executives alleging fraud of Rs870 crore, said it is taking longer than usual time to reconcile customer accounts due to the ongoing investigations.
 
"We are pro-actively 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 Subhinder Singh Prem and Chief Operating Officer Vishnu Bhagat across various dimensions, which also includes its own customers.
 
"Hence it is taking longer than usual to reconcile customer accounts," it added.
 
When 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 Adidas Group CEO Herbert Hainer on 23rd July, the franchisees sought his intervention regarding handling of the situation by the new management in India.
 
"For the last 4 months, 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.

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Union Bank of India Q1 net profit up 10.2% to Rs511 crore

During the first quarter, Union Bank's total revenues, including interest income, rose to Rs6,561.10 crore from Rs5,399.68 crore last year

 
Mumbai: State-run Union Bank of India on Friday reported 10.2% rise in its first quarter net profit to Rs 511.59 crore, reports PTI.
 
The state-run lender had a profit of Rs464.42 crore during the corresponding period of the previous fiscal.
 
During the quarter to end-June, total income of Union Bank increased to Rs6,561.10 crore from Rs5,399.68 crore same quarter last year, it said in a filing to the BSE.
 
It further said the gross non-performing asset during the period grew to Rs6,541.46 crore from Rs3,745.10 crore.
 
Also, the bank maintained capital adequacy ratio at 11.6% during the April-June quarter of FY13, against a CAR of 12.9% in the same period of the previous fiscal, the lender said.
 

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ICICI Bank Q1 net profit jumps 36.2% amidst economic difficulties

The bank has posted 36.2% year-on-year increase in its profit for the quarter ended June 2012, aided by strong net interest incomes, steady fee income and lower provisions 

 
ICICI Bank, one of India’s largest private sector banks, has reported a first quarter net profit of Rs1,815 crore which grew 36.2% year-on-year (y-o-y) aided by strong net interest income growth, steady fee income and lower provisions. For the quarter to end-June, the lender’s net interest income grew 32.4% y-o-y and 2.8% quarter-on-quarter (q-o-q) to Rs3,193 crore aided by 5.8% q-o-q growth in its loan book. 
 
Despite increase in revenues and profits, ICICI Bank’s capital adequacy ratio deteriorated from 19.6% to 18.54%, while tier-I capital adequacy ratio slumped from 13.4% to 12.78%. However, it posted 40 basis percentage points, y-o-y improvement in its net interest margins to 3.01%.
 
Its operating profit rose 32%, y-o-y, to Rs2,949 crore for the quarter ended June 2012, which is higher than the preceding three quarters y-o-y growth rates of 27%. However, it declined sequentially from Rs3,111 crore. It managed to boost operating profit despite sub-par revenues which grew only by 22% when compared to its past three quarter y-o-y growth rates of 26%. Its fee income grew by 4.37% y-o-y, to Rs1,647 crore. The bank quotes at a respectable return on equity of 12%. However, it commands single digit valuations when its market capitalisation is quoting at only eight times its operating profits. This is due to the fact that the bank had hit a plateau recently, in terms of operating profits while the banking industry is going through a lean patch.
 
Despite a good showing by the bank, areas of concerns are its decline in its capital adequacy ratio, from 19.57% to 18.54% and an increase in its current account-savings account (CASA) ratio from 41.9% it recorded during June 2011 quarter to 40.6% for the current quarter. This was due to the fact that savings account deposits increased by 17%, y-o-y, to Rs77,923 crore, while current account was at Rs30,754 crore. Its loan book advanced increased by 22% y-o-y to Rs2,68,430 crore for the current quarter.
 
The drawbacks seems minor as its asset quality improved, when its non-performing asset ratio decreased by 30 basis percentage point to 0.61%, for this quarter when compared to 0.91% for the corresponding quarter last year. It remained stable on a sequential basis. The bank’s provision coverage ratio was 80.6% for the current quarter when compared to 76.9% for the June 2011 quarter. Its restructured asset stood at Rs4,172 crore as on 30 June 2012. 
 
In its press release, the bank said that it is continuing its strategy of pursuing profitable growth. In this direction, the bank continues to leverage its strong corporate franchise, its international presence and its expanded branch network. The bank has 2,755 branches as 9.366 ATMs as of 30 June 2012. 
 

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