Reebok India has lodged a police complaint against two former executives alleged to have siphoned off 8.7 billion rupees (US$155 million) from the sportswear firm.
The two ex-employees are accused of forging records, stealing goods and creating ghost distributors across the country to defraud Reebok over five years.
A Reebok India spokesman said an FIR (first information report) had been lodged with police on May 22 against former managing director Subhinder Singh Prem and former chief operating officer Vishnu Bhagat over the alleged scam.
Reebok's parent company, the German sports giant Adidas, said it would co-operate fully with the Indian authorities. "We are given to understand that our criminal complaint has been registered for investigation by the Indian law enforcement authorities," Adidas said.
Both men were dismissed in March when the fraud was first discovered, local reports said. They were not immediately available for comment.
Police in Gurgaon, a booming satellite city outside New Delhi, are investigating the complaint, which accuses the men of falsifying sales records and passing off genuine goods as defective products in order to sell them on.
Last month Adidas bosses in Germany warned that 2012 earnings were likely to be hit by the discovery of "commercial irregularities" at the Indian branch of its Reebok subsidiary.
Adidas said at the time that "maximum negative impact could be up to a pre-tax amount of 125 million euros (US$158 million)."
Copyright Agence France-Presse, 2012