SHANGHAI (Reuters) – Samsonite International SA <1910.HK> said on Friday it has replaced under-fire Chief Executive Ramesh Tainwala after a short-seller attack caused the firm’s shares to plunge sharply before being suspended last week.
The world’s biggest luggage maker said in a filing to the Hong Kong stock exchange that Chief Financial Officer Kyle Gendreau would take the helm with “immediate effect”. The firm’s shares will also resume trading on Friday.
The moves come after short seller Blue Orca accused Samsonite of questionable accounting practices and was critical of how the firm engaged in a number of related party transactions with entities owned by Tainwala.
The company’s shares plunged over 20 percent in two days of trading late last week, leaving it with a valuation of around $4.8 billion (£3.6 billion).
Samsonite said previously it reserved the right to take legal action. Tainwala told Reuters in a statement last week the firm maintained a “very high standard” of accounting and that “every allegation … is mischievous and false”.
The firm said on Friday Tainwala would no longer be an executive director and that it was in talks with him about the terms of his departure, which would be confirmed at a shareholder meeting to be convened “as soon as practicable”.
It said his resignation was “in the best interests of the company and its shareholders”.
Headquartered in Massachusetts, Samsonite is one of the few major foreign stocks listed in Hong Kong, alongside Prada <1913.HK> and cosmetics firm L’Occitane International <0973.HK>.
(Reporting by Adam Jourdan in SHANGHAI and Aaron Saldanha in BENGALURU; Editing by Paul Tait and Stephen Coates)