Folli Follie given a rather small fine
The Capital Market Commission has slapped Athens-listed Folli Follie Group and nine board members or officials with a fine of 4.02 million euros for market manipulation and violation of rules regarding data submission.
After some five hours of deliberations the stock market watchdog decided to impose the administrative penalties on the luxury jewelry company based on the conclusions of an investigation by its inspectors and legal counselors.
Following the regulator’s decision, the case will now be forwarded to the competent prosecutor with the charge of manipulating the market through spreading false news and misleading the investing public.
This development came as a discussion of the main application for Folli Follie’s entry into the pre-bankruptcy process remains pending; it will be examined on September 12. The temporary protection the blue chip company has achieved was secured thanks to the consent of its subsidiary, FF Group Finance Luxembourg II, which has provoked the reaction of its real creditors – the banks and its bondholders.
The Capital Market Commission explained its decision saying that the company and its officials manipulated the market since they failed to produced the documents to confirm the amount of 242.5 million euros in cash reserves according to the 2017 group results of Folli Follie. Therefore, “through those financial reports, these persons supplied information that gave false or misleading indications about the stock price of the company,” according to the decision.
Market sources told Kathimerini that the relevant institutional framework will need to be revised as the amount of the fine appears very small in relation to the perceived manipulation of the market. In recent contacts between Greek listed company officials and foreign investors at roadshows, the former witnessed the latter’s strong criticism of corporate governance in Greece. Many foreign investors went as far as saying that the Folli Follie case could have increased the cost of financing Greek enterprises on foreign markets by some 200 basis points.
Sources also believe that Folli Follie’s temporary protection from its creditors will not prevent judicial authorities from freezing the group’s bank accounts.
