Folli Follie Debt Restructuring To Avoid Bankruptcy Fosun International'S Two Shareholder

On the Western Valentine's day, Greek jewellery and accessories retailer Folli Follie announced the approval of a bondholder's revised plan to avoid bankruptcy.

In 2018, the Greek brand operator Folli Follie Commercial Manufacturing and Technical SA (FFGRP.AT) Fu Li (FFGroup) met with a short selling agency questioning the financial fraud. Then the company experienced a suspension survey after its share price was down, and the final audit institution was sitting on its false behavior. The founder of the company family was also forced to leave the management of the company in all Liv.

The US hedge fund Quintessential Capital Management LLC (QCM) published a report in May last year, questioning the financial data of Folli Follie. It also called the group exaggerating the scale of the retail network, especially in Asia, especially in China.

FF Group and group management immediately strongly denied that it is still difficult to stop the Greek securities regulator Hellenic Capital MarketCommission (Greek capital market committee) and prosecutors to carry out an investigation.

FF Group co-founder Dimitris Koutsolioutsos and EkateriniKoutsolioutsos, and their son, George Koutsolioutsos, have resigned from the board as vice chairmen and chief executives.

Meanwhile, three of them and seven others, including chief financial officer, accounting controller, Asian president and director, were formally charged with fraud and money laundering by Greek financial prosecutors at the end of last year. Assets were also frozen.

The initial audit required by the Greek judiciary authorities showed that FF Group's cash balance in Asia at the end of fiscal year 2017 was only $6 million 400 thousand, and recorded a loss of $44 million 700 thousand, while the original earnings claim that cash balances and profits reached $296 million 700 thousand and $316 million 400 thousand respectively, and Asia's annual revenue was only 10%, or 116 million 800 thousand dollars, of the 1 billion 112 million 300 thousand dollar reported earnings, roughly in line with QCM's estimate.

The final report of the Greek accounting and auditing standards Regulatory Committee was even more pronounced. FF Group, one of its Asian subsidiaries, Folli Follie Group Sourcing Ltd., offered $122 million interest free loans to Landocean Industrial Ltd., which was not commercially connected in 2016, and sold 862 million 500 thousand and 995 million 100 thousand US dollars in 2016 and 17 years with a company named NG NG.

But Landocean Industrial Ltd. and NG Boon Soon are likely to be just shell companies.

It is reported that the Greek capital market committee has also completed the FF Group2016 fiscal year survey, is expected to be fined again, and the fine will be flat in the 2017 fiscal year financial penalties of 4 million euros; the findings will also be pferred to the prosecutor.

In July, FF Group first obtained a provisional injunction against creditors in accordance with the 106th bankruptcy law of Greece. In September, the prohibition order was successfully postponed for two months. At that time, the market had seriously questioned whether the group could take up the reorganization plan and the new investors' challenge to creditors after the prohibition order expired in November 12th.

In November, FF Group again applied for an injunction. At that time, the management said that only temporary protection measures could ensure that the group had a stable platform and sufficient time to complete the reorganization plan, and also helped to alleviate the risk of large-scale layoffs at home and abroad, but the Greek court rejected the application.

Greek local media quoted sources saying that the local anti money laundering agency had seized property assets of FF Group, which would seriously damage the restructuring plan that the group needed to submit to the court on 22 January 2019, making it more difficult for creditors to get support and funding from creditors.

It is reported that the second largest shareholder, 0656.HK, has rejected FFGroup's request for Euro 20 million financing.

After the short report in May, FF Group mortgaged its Attica Department Stores SA37.5% stake in the Greek department store to the bank for emergency loans, and the related banks began to auction the stake in November.

At present, Dimitris Koutsolioutsos, which holds 35% of the group's shares, is still the largest shareholder. In 2011, the FF Group's Fosun International (0656.HK) accounted for 15% of the second largest shareholder.

Fosun International's annual report at the end of August showed that investment in Greek companies turned from a 62 million euro yield to a loss due to a false accounting scandal.

In the FFGroup paction, Fosun International's total investment was 86 million euros, during which it received a total dividend of 7 million euros, while the collapse of FF Group's share price plummeted the fair value of the investment by 101 million euros.