Greek regulator asks Folli for independent audit, shares dive again

Greece’s securities regulator said on Monday it will ask luxury goods maker Folli Follie to have its 2017 consolidated accounts scrutinized by an independent auditing firm after an equity fund report sent its shares crashing last week.

Folli stock fell 30 percent on the Athens stock exchange on Friday after long-short equity fund Quintessential Capital Management (QCM) issued a report saying the company had overstated the number of points of sales it operates worldwide.

“Quintessential Capital Management’s report is unfounded, false, defamatory and misleading which results in damaging the interests of the firm and its shareholders,” Folli said in a stock exchange filing on Friday, adding that it has ordered its legal advisers to defend its legal right.

Folli has activities in Greece, China and other countries around the world and a current market value of 719 million euros after 300 million euros of capitalization was wiped out on Friday.

Its shares tumbled a further 30 percent in early Monday trade to 7.52 euros.

Headquartered in New York, QCM has a short position on Folli shares. It also said in its report that it was concerned over Folli’s finances.

The Greek securities regulator said there would be a clear timetable for the conclusion of the audit and that it would also ask QCM to come up with an “analytical explanation of its arguments” and submit the relevant data.

The securities watchdog is also probing transactions on Folli shares, including short sales, since last Friday, it said.