Audit Shows Folli Follie Faked Numbers, Embezzlement, Links to SYRIZA

December 23, 2020

ATHENS – An interim audit of the bankrupt Greek jewelry and accessory company Folli Follie allegedly showed “substantially erroneous" results that misled investors and signs of massive embezzlement, implicating some high-ranking members of the former ruling Radical Left SYRIZA government.

It was conducted by the firm PwC, said the business newspaper Naftemporiki, a review of several years of figures that reportedly also showed that the numbers were fake and shareholders and the company's managers profiting off high share prices and trading.

Between 2001 and 2015, for instance, dividends and returned capital doled out to shareholders, based on what the newspaper called "cooked books"  totaled 116 million euros, equivalent to $141.44 million.

Founder and primary shareholder Dimitris Koutsolioutsos received 44 million euros ($53.65 million) on top of 130 million euros ($158.51 million) from selling off shares, the report said.

His son and successor leading the failed company,  former CEO Georgios Koutsolioutsos, collected 3.8 million euros ($4.63 million) and another 2.2 million euros and 2.2 million euros ($2.68 million) during the same period.

Both men have been relieved of positions within the company, which is now overseen by a court-appointed management but there have been no prosecutions for what multiple media reports suggested is criminal activity.

The report also called for further investigation into Athens Stock Exchange transactions of the group’s share via accounts of third parties but ongoing probes for the past couple of years have gone essentially nowhere.

The audit claimed that between 2007-17 the figures in the company's consolidated financial statements were  false and deceptive, with phony sales ascribed to subsidiaries of the group in Asia, beginning in 2001, the paper said.

It found the company's share price over time recorded an upward course, allowing the father and son to rake off huge profits from share sell-offs through seven private placements between 2004 and 2017.

The report also names – using italics – three former SYRIZA ministers and the chairman of the powerful standing committee of economic affairs in Parliament, as pushing through a bill that kept a portion of the company's duty free stores outside the European Union framework but the paper wouldn’t reveal them.

The newspaper Kathimerini – also without naming people whose names are in the report – said the audit was forwarded to an Athens prosecutor’s office, adding to a pile of other evidence that hasn’t been acted on, and that it identified two ministers of the former SYRIZA government which was ousted in July 7, 2019 snap elections.

The office of former premier Alexis Tsipras, the party’s leader, was also mentioned and the paper said that there was an email between a security executive of Folli Follie and George Koutsolioutsos with a reference to Tsipras.


It was said to state that “the instruction from above is to assist the (Folli Follie) Group. This is the position of Maximos Mansion (the PM’s office.) The Prime Minister was also informed.” There was no report of a response from Tsipras.

It also implicated a member of the SYRIZA party and another Member of Parliament who went on to become a minister, neither of whom were named either despite their identities being revealed in the audit, with no explanation why.

The report includes emails in 2018 from a company executive to the George Koutsolioutsos, which claimed that SYRIZA officials supported the Koutsolioutsos family in maintaining control of Folli Follie and were pressuring the Hellenic Capital Market Commission to delay an audit.

The prosecutor’s office is expected to decide whether the report will be sent to Parliament, based on the law on the responsibility of ministers as the father and son face felony charges relating to the falsification of the company’s financial data.

In October, the New Democracy government said it would suspend the voting rights of top executives of the troubled company who were trying to remove board members wanting to settle with creditors during bankruptcy procedures.

Unidentified sources at the Finance Ministry, which oversees the Capital Market Commission, told Kathimerini there’s dismay they had to legislate again in a case they said stains the reputation of the Greek securities market.

The same sources said that after a November 2019 measure imposing a temporary management on Folli Follie, the market watchdog stopped short of ejecting more or all board members, apparently without explanation why not.

Koutsolioutsos, accused of market manipulation, forgery, and forming a criminal organization, made his move after the country’s Capital Market Commission demanded the resignation of his son, former CEO Georgios Koutsolioutsos.

Based on a lengthy investigation by prosecutor Yiannis Dragatsis, the actions concern members of the Koutsolioutsos family, the founders of the Folli Follie group, but also the firm’s executives between 2009into early 2018.

Koutsolioutsos and his son, and another four individuals are charged with running, forming and joining a criminal organization, including the head finance chief, and an employee of a subsidiary in Asia, as well as the company’s Greek financial director.

Six people, of which three are foreign nationals, stand accused of criminal forgery and Dimitris and Georgios Koutsolioutsos of morally instigating forgery, while 13 people face charges for manipulating stocks, including three members of the Koutsolioutsos family and the rest of the company’s board in 2016-2017.


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