Kathimerini Greece Newsroom
The trial of Greek jewelry maker Folli Follie is expected to finally take place in June after being deadlocked for some time. This was due to lawyers abstaining from their duties in trials concerning criminal organizations due to legal disagreements concerning a legislative provision stating that any sentences imposed would be served. However, the Athens Bar Association has granted permission for lawyers to attend the proceedings, enabling the trial to go ahead.
The trial concerns Folli Follie founder Dimitris Koutsolioutsos and his son Tzortzis, along with 11 others, who face charges of falsified balance sheets, financial offenses and forming a criminal organization. The president of the court postponed the trial until June last December, citing the risk of the statute of limitations expiring for certain offenses if the situation continued.
Folli Follie has been embroiled in controversy since 2018 when hedge fund Quintessential Capital Management and short-seller Carson Block's Muddy Waters Research raised concerns about the company's financials. They alleged that Follie Follie inflated its sales and profits, and questioned the authenticity of its stores in China. The accusations led to an investigation by Greece's securities regulator, the Hellenic Capital Market Commission (HCMC), which found that the company had overstated its 2016 revenue by 1.2 billion euros ($1.4 billion) and made misleading statements to the market.
In May 2019, the HCMC fined Folli Follie and its executives a total of 4.4 million euros ($5.1 million) for violating disclosure rules and misleading investors. The company's stock was also suspended from trading on the Athens Stock Exchange. In addition to the HCMC's investigation, Follie Follie was also investigated by the Athens public prosecutor's office for fraud and money laundering.
In February 2021, a Greek court indicted the company's founder and former CEO, Dimitris Koutsolioutsos, and his wife, as well as other executives and auditors, on charges of fraud, money laundering, and participation in a criminal organization. The charges carry penalties of up to 20 years in prison. The case against Follie Follie is still ongoing, and the company has denied any wrongdoing.
