Samsonite chief resigns after accusation of résumé fraud

pulse

June 1, 2018 3:43 PM

Then, after financial disappointments and decades of shifting ownership, Samsonite took its shares public in the Chinese city of Hong Kong, seeking to capitalize on Asia’s growing legions of well-heeled travelers.

The 108-year-old maker of suitcases and bags was once the pre-eminent U.S. name when it came to life on the go.

Its troubles are not over. The company’s top executive stepped down this week after being accused by a short-selling investor of falsely claiming to have a doctoral degree.

Samsonite said Friday it had accurately represented the academic credentials of the executive, Ramesh Tainwala, ever since going public in Hong Kong in 2011. Still, the company said that it took the allegations “seriously” and that Tainwala would be replaced immediately by its finance chief, Kyle Gendreau.

In a report published May 24, an activist investment firm called Blue Orca Capital accused Samsonite of using questionable accounting practices to inflate its earnings and profits. The report said that entities controlled by Tainwala and his family did business with Samsonite in ways that it said raised eyebrows.

Blue Orca also wrote that Tainwala was referred to as “Dr. Ramesh Tainwala” in a few U.S. and Indian regulatory documents. But when Blue Orca contacted the institution from which Tainwala, according to some biographical sources, received a doctorate, the institution said he had not obtained a degree.

Samsonite responded by calling the report “one-sided and misleading.” It requested that trading in its shares be halted for most of the past week. And Friday, it published a rebuttal defending its accounting practices and transactions with related parties.

Blue Orca, which does not hide the fact that it stands to profit if Samsonite’s stock price falls, says in its report that investors trade Samsonite shares at a high premium relative to its earnings, as if it were a luxury name comparable to Burberry. This is “ridiculous,” the firm’s report argues.

In a news release responding to the report, Samsonite said it had a strong record of organic growth and free cash flow.

This article originally appeared in The New York Times.

pulse

Enhance Your Pulse News Experience!

Get rewards worth up to $20 when selected to participate in our exclusive focus group. Your input will help us to make informed decisions that align with your needs and preferences.

I've got feedback!

JOIN OUR PULSE COMMUNITY!

Unblock notifications in browser settings.

Eyewitness? Submit your stories now via social or:

Email: eyewitness@pulse.ng