ATHENS – Suspended from the Athens Stock Exchange (ASE) over alleged irregularities in financial reporting, the Greece-based Follie Follie Group (FFG), a jewelry and accessory maker with operations in 25 countries could be targeted by lawsuits from shareholders.
The Hellenic Investors’ Association said on May 8 it would bring legal action also on behalf of bondholders after the company lost 70 percent of its value over the previous month.
The group said it wanted more information on the company’s results from the Hellenic Capital Market Commission, the market regulator in Greece, as well as the European Securities and Markets Authority (ESMA) and all interested parties, including the company itself, and the hedge fund Quintessential Capital Management (QCM), the business newspaper Naftemporiki reported.
QCM cited six points in its negative report on the company’s results, including:
– Discrepancies in the number of sales points
– Major storefronts on the company’s website had closed – two in New York City
– A smaller presence on the Internet and social media compared to Asian competitors
– Financial results showing increased cash infusions into Asian subsidiaries
– Only two Chinese subsidiaries (Fu Li Fu Lei and Binlianyun), with total revenues of $40 million and 50 sales points when FFG referred to $1 billion in revenues for Asia
– Replacement of the Baker Tilly consulting and auditing firm with a less-known firm
The ASE suspension The suspension was sought by the Capital Markets Commission ahead of an audit, and earlier by the company itself although Folli Follie also said it was because of a “coordinated dissemination of misleading news” regarding the company, with very negative impressions created, the paper said.
The company was established in 1986 in Greece by Dimitris Koutsolioutsos in the commercial district of Athens. Folli Follie started by manufacturing jewellery and in 1994 launched their watch line. In 1995 the first overseas store opened, in Japan. It is now ranked amongst the top 10 brands in luxury goods in Japan with 80 stores.
The company’s design team consists of Italian, Swiss and Greek top designers who work together to present two collections per year to offer a “full fashion concept” of branded, modern jewellery, watches and accessories at affordable prices. The company also offers a men’s watch collection under the brand name Folli Follie.