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Society

Folli Follie Executives Charged With Fraud, Money Laundering

December 11, 2018

ATHENS – Their company in near-ruins, the founders and seven executives of the bankrupt Greek jewelry and accessory maker Folli Follie were charged by a prosecutor with fraud, money laundering and felonies as part of a probe into its troubled finances.

The upscale brand that is among the most known in Greece and has a big presence in Asia and elsewhere, came under investigation after a hedge fund raised questions over the company’s financial statements, charging the number of outlets was overstated and its finances dubioius.

A prosecutor now has moved to make the charges, the news agency Reuters said, with Folli Follie on the edge of going under after its shares plummeted and assets seized while locked out of the Athens Stock Exchange.

In October, a Greek court ruled the bank accounts of the Koutsolioutsos family, Folli Follie’s founders, and other incumbent and former board members and executives should be frozen.

The charges were laid against Dimitris Koutsolioutsos, founder of Folli, his wife and his son George Koutsolioutsos, who was the CEO of the company and a member of its board, a judicial source told the news agency.

Charges were also reportedly brought against the Chief Financial Officer, the chief of accounting, the head of its Asian operations and three other board members, the source added, saying that the prosecutor also ordered that all of the persons charged not be allowed to leave the country.

Two lawyers representing the founder and the CEO were not immediately available for comment, nor was a spokesperson for the company, Reuters said.

Folli has previously said the claims in the hedge fund report were unfounded and misleading.

The company’s assets were frozen after an audit found $1.29 billion missing from an Asian subsidiary, lost a bid for protection from creditors when an Athens First Instance Justice ruled against the company.

That raises the specter of one of Greece’s best-known businesses facing more court challenges for its remaining assets and worth and an unstructured bankruptcy, the business newspaper Naftemporiki earlier said.

With the court ruling, FF Group’s management and legal team had to work out an agreement with creditors and seek financing for a restructuring plan. A group representing investors in the country has already filed and received a first injunction ordering a temporary freeze of assets totaling 2.5 million euros ($2.86 million).

Prosecutor Yiannis Dragatsis ordered the freeze because the financial executive sent “falsified data from Asia” which the accountant “approved.” That came after a court rejected an injunction filed by Folli Follie for temporary protection of its assets from creditors.

The asset freeze came just the company, facing closure after an audit said $1.29 billion was missing, was hit with a report it may have given $122 million through it’s Asian subsidiary to unknown recipients, including a business that may not exist, said Kathimerini.

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