The final report of the Hellenic Accounting and Auditing Standards Oversight Board (ELTE) on the dealings of jewelry maker and retailer Folli Follie refers to the “possible channeling” of $122 million by the company’s Asian subsidiary to unknown recipients.
ELTE’s conclusions, which have been forwarded to the financial prosecutor’s office and the anti-money laundering authority, cite that interest-free loans of $122 million were made by Folli Follie Group Sourcing Limited to Landocean Industrial Limited in 2016 without any business rationale for the transactions and without collateral requirements. Even the very existence of Landocean is in doubt.
ELTE also reported that Folli Follie’s Asian subsidiary made sales of $995.1 million in 2017 and $862.5 million in 2016 to a firm named NG Boon Soon, another company whose existence is disputed.
Meanwhile, late on Thursday, Folli Follie’s main shareholder, the Koutsolioutsos family, which also controls the company, announced it had filed for the protection of subsidiary Links of London under the US bankruptcy code. The implementation of this initiative to protect the subsidiary from forced measures will mean the shutdown of six Links of London points of sale and nine shops-in-shops. The subsidiary’s international activities are not affected by the bankruptcy application, argues Folli Follie, adding that the Canadian Links of London subsidiary will continue to operate.
Also rumors have been making the rounds since Wednesday evening saying Chinese stakeholder Fosun could participate in the restructuring of the Athens-listed group. However, a source close to Fosun told Kathimerini that “until there is a full picture on the company’s precise financial situation, the Chinese group will not comment on any information.” This suggests that discussions with the Koutsolioutsos side are ongoing but no decisions have been reached yet.