A day after this newspaper reported about a city-based businessman, R.P. Shah filed a complaint against VF Brands India Pvt Ltd – the Indian subsidiary of American worldwide apparel and footwear company VF Corp – alleging cheating and forgery to the tune of Rs 92 lakh, the VF Corp, in a statement said that there is no forgery or cheating made out in this case and the entire claim relates to disputes in relation to certain accounting entries and are already the subject of arbitration proceedings.
“We can confirm that FIRs have been filed by each of M/s Krysh Retail Pvt. Ltd. (KRPL) and M/s Vishal Furnishers. However, these FIRs are solely intended to pressure VF Brands India into accepting certain claims for money raised by the companies in civil disputes under franchise agreements. The civil and criminal claims filed against VF and our employees in both cases are baseless. In fact, VF Brands India is concurrently pursuing a claim against the ex-business partner over a sum of USD 1 million owed by the ex-business partner to VF and one against Vishal Furnishers for an amount of approximately USD 180,000. It is evident that baseless allegations made by the both these persons are made with a view to pressure VF and its employees into forgiving amounts owed by each of them.
We can also confirm that an employee who was detained and assisting authorities in an investigation was granted bail on November 12 by the Metropolitan Magistrate's Court in Ballard, Mumbai.”
The statement further added, “The order passed by the Magistrate's Court notes that this appears to be a purely civil dispute. It is important to note that the Mumbai High Court on November 2, 2018 passed an order stating that no coercive action be taken against VF Brands India and our employees and also observed that there was no justification provided for the timing of the arrest.
Contrary to your article, no other employees were arrested and the employee that was arrested was not the company CEO. It is important to note that the High Court of Judicature at Allahabad on November 15, 2018 also passed an order finding prima facie merit in the contention that the allegations made in the FIRs do not disclose any cognisable offence and the allegations relate to a purely civil matter.
The order also states that no coercive action be taken against VF Brands India and our employees in relation to an FIR. Specifically, the allegations of fraud and other offences by VF Brands India are incorrect and baseless. We would like to state the following facts: VF Brands India has already clarified that each of the debit entries alluded to by KRPL has a corresponding credit entry. Following termination of the relationship with KRPL in 2016, the store was handed over to another franchisee in August 2016. Since orders are booked under the store name (and not the franchisee name), orders placed by KRPL before termination of the agreement were invoiced to the correct store but the previous franchisee’s (KRPL) name. The entries were reversed in KRPL’s account and subsequently billed to the new franchisee. None of these amounts have actually been claimed from KRPL. We wish to make it abundantly clear that no charge sheet has been filed against VF Brands or any of its employees or directors in relation to any of the allegations made above by KRPL or Vishal Furnishers. We strongly believe the claims against VF Brands India and our employees have no merit and we are pursuing legal action against the ex-business partner (KRPL).”