Folli's chairman, vice-chair step down amid jeweller's financial woes (updated)

Folli Follie SA

26/09/2018 16:27

(Adds detail)
    ATHENS, Sept 26 (Reuters) - Folli Follie's chairman and
vice-chairperson stepped down after a preliminary audit of the
troubled jewellery maker revealed discrepancies in 2017
financial statements, Folli  HDFr.AT  said on Wednesday.
    Folli, whose finances are being investigated by Greek
authorities after equity fund Quintessential Capital Management
(QCM) raised concerns over its 2017 finances, has hired Alvarez
and Marsal and Ernst & Young to carry out an audit.
    Chairman Dimitrios Koutsolioutsos and vice-chairperson
Ekaterini Koutsolioutsou, who jointly founded Folli in 1982,
stepped down after a board meeting on Tuesday discussed Alvarez
& Marsal's preliminary report over the group's Asian operations,
a big chunk of its turnover.
    Folli said the report showed the Asian business had a cash
balance of $6.4 million last year compared to $296.7 million
reported in 2017 statements. It also revealed that the
operations had a loss of $44.7 million last year. Folli had
reported a profit of $316.4 million from those operations last
year.
    "It's with great sadness and among a simmering crisis for
our company, that I set up and served for 36 years, that I am
resigning," Koutsolioutos said in a statement.
    "Unfortunately, it was not possible for me to successfully
control the operations of the Asian group which has been my
responsibility," he added.    
    Folli, which employs about 5,000 people worldwide, this
month won a two month extension in an injunction protecting its
assets from creditors. A group of creditors had sought the
lifting of the injunction to recoup loans.  urn:newsml:reuters.com:*:nL5N1VY4IM
    The audit, which was presented to the Greek securities
regulator on Wednesday, is key to Folli's restructuring and the
company has pushed back its annual shareholder meeting to
October 10, waiting for it to be completed. 
    Folli said it was working on a restructuring plan which is
expected to be completed by the beginning of next month and was
in preliminary discussions to secure new funding soon. 
    Folli's shares plunged in May after the QCM report,
prompting the Greek securities regulator to suspend trading of
the shares on May 25 after the firm failed to provide requested
financial data.
    Dimitris Koutsolioutsos owns a 35 percent stake in Folli,
while Fosun holds 15 percent, according to Reuters data.

 (Reporting by Angeliki Koutantou, writing by George
Georgiopoulos; Editing by Elaine Hardcastle)
 ((george.georgiopoulos@thomsonreuters.com; +30210 337 6437;
Reuters Messaging:
george.georgiopoulos.thomsonreuters.com@reuters.net))