Folli says needs time to finish audit, will fix "operational failures"

Folli Follie SA

11/06/2018 08:33

ATHENS, June 11 (Reuters) - Luxury jewellery maker Folli
Follie  HDFr.AT , whose finances are being probed by the Greek
authorities, said it needed time to conclude an audit and would
fix any "operational failures".
    The Greek firm's shares plunged on the Athens stock exchange
in May after a long-short equity fund Quintessential Capital
Management (QCM) issued a report in May saying the company had
overstated the number of retail outlets it operated worldwide.
    Folli denied the report, saying it was unfounded and
misleading.
    Greece's securities regulator suspended the shares from
trading on May 25 after Folli failed to provide requested
financial data.
    Last week a prosecutor ordered a preliminary investigation
into the company after the securities regulator filed a lawsuit
against Folli's management.  urn:newsml:reuters.com:*:nL5N1T73JX  urn:newsml:reuters.com:*:nA8N1S2006
    Local media reported last week that Folli was dragging its
feet on signing a contract with the audit firm that would
scrutinise its finances at the regulator's request.
    Folli said in a bourse filing over the weekend that the news
was "inaccurate" and that it needed time to prepare "such a
demanding and complex task."
    "We will do everything in our power to provide all required
information and we are ready to remedy any operational failures,
if any," Folli said in the filing.
    A new internal audit committee, a prerequisite for signing
the contract with Ernst & Young for the audit, was set up last
week, it added.
    Folli is 35 percent owned by the Koutsolioutsos family and
had sales of 1.4 billion euros ($1.6 billion) last year, with
Asian operations accounting for more than two thirds of
turnover.
   Its Chief Executive George Koutsolioutsos said the company
has been under an "unprecedented attack" and would fix any
mistakes that a new strict audit might reveal.
    New York-based QCM, which previously said it held a short
position on Folli shares, had also said in its report that it
was concerned about Folli's finances.

 (Reporting by Angeliki Koutantou
Editing by Edmund Blair)
 ((angeliki.koutantou@thomsonreuters.com; +30 210 3376436;
Reuters Messaging: angeliki.koutantou.reuters.com@reuters.net))