QCM founder: Folli Follie convictions are a ‘victory for transparency’
The conviction of five top executives of jewelry maker Folli Follie for falsifying balance sheets and other financial offenses in an Athens court last week is “a victory for transparency and integrity in the financial markets,” the founder of the hedge fund that revealed the fraud told Kathimerini.
The court imposed lengthy prison sentences to three members of the company’s founding family and two more executives, one of which is a fugitive.
“We have long advocated for stringent measures against corporate fraud, and today’s decision underscores the importance of vigilance and accountability,” said Gabriel Grego, the founder of Quintessential Capital Management (QCM), said in a statement issued on June 27.
“This landmark ruling serves as a potent reminder that financial malfeasance will not go unpunished,” the fund said adding that it has an “unwavering faith in Greek institutions and their commitment to upholding justice and protecting investor interests.”
“This case also highlights the crucial role that activist short sellers play in maintaining market integrity. Through rigorous investigation and fearless exposure of fraud, activist short sellers like QCM are essential in uncovering the truth and protecting investors from corporate misconduct,” it added.
The fraud involving the luxury jewelry maker erupted in 2018, after QCM issued a report saying the company had overstated the number of retail outlets it operates worldwide and raised concerns over its reported finances.
A 2020 audit report by PricewaterhouseCoopers, found that the company’s major shareholders, the Koutsolioutsos family, reaped the benefits of a well-orchestrated fraud scheme that lasted for at least 17 years, under the nose of the supervisory authorities, generating hundreds of millions of euros in profits.
