Folli executives' bank accounts frozen during investigation

Folli Follie SA

10/10/2018 14:49

ATHENS, Oct 10 (Reuters) - Current and former executives at
Greek jewellery maker Folli Follie  HDFr.AT  have had their bank
accounts frozen pending an inquiry into its 2017 financial
statements, court documents seen by Reuters showed.
    Folli, an upmarket Greek brand with a distinct peach curvy
logo, has been in the spotlight after a hedge fund raised
concerns over its financial statements for last year.
    The hedge fund, Quintessential Capital Management, said in a
report last May that the company overstated the number of its
outlets. It also questioned its accounting practices in Asia
where the company had expanded rapidly.
    The report sent shares in the company into a tailspin,
prompted a fine from the Greek securities commission and an
investigation and the resignation of its founders last month.
 urn:newsml:reuters.com:*:nL5N1UT77X
    A Greek court ruled this week that the bank accounts of the
Koutsolioutsos family, who are the founders, and other incumbent
and former board members and executives should be frozen,
according to the decision seen by Reuters.
    A Greek investigating prosecutor had sought the order,
citing "enough indications" that the results for 2017 that
Folli's executives approved and published were inaccurate in
terms of sales, profit and cash reserves, according to the
decision.
    The company and the founding family declined to comment. 
    A preliminary audit ordered by Folli revealed last month
wide discrepancies in its Asian business for 2017, prompting
Chairman Dimitrios Koutsolioutsos and vice-chairperson Ekaterini
Koutsolioutsou, the couple who jointly founded the firm in 1982,
to step down.  urn:newsml:reuters.com:*:nL8N1WG0EZ
    Chief Executive George Koutsolioutsos, the son of the
founders, has distanced himself from his father. He has vowed to
stay on to help reshape the company and protect its employees,
partners and suppliers who he said numbered more than 10,000.
 urn:newsml:reuters.com:*:nL8N1WG0EZ
    A shareholders meeting that was due to approve 2017
financial results on Wednesday was postponed for failing to
muster the necessary quorum and was rescheduled for Oct. 30.
    It is the third time a shareholders meeting has been
postponed pending the completion of a full audit in last year's
statements.
    Folli has won a temporary protection of its assets from
creditors until November and has hired Deloitte to help it
prepare a restructuring plan and in talks with potential
investors.  urn:newsml:reuters.com:*:nL5N1VY4IM
    Dimitrios Koutsolioutos holds a 35 stake in Folli, Fosun
International a 15 percent stake and Fidelity a 6 percent,
according to Refinitiv Eikon data.

 (Reporting by Constantinos Georgizas and Angeliki Koutantou
Editing by Keith Weir)
 ((angeliki.koutantou@thomsonreuters.com; +30 210 3376436;
Reuters Messaging: angeliki.koutantou.reuters.com@reuters.net))