A Greek prosecutor has laid felony charges against jewellery maker Folli Follie’s founders and seven other executives for fraud and money laundering, a judicial source told Reuters on Friday.
Folli, an upmarket Greek brand, has been under scrutiny since a hedge fund raised concerns over its financial statements for last year.
Quintessential Capital Management said in a report in May that the company overstated the number of its outlets and questioned its accounting practices in Asia where it had expanded rapidly.
The report sent Folli shares into a tailspin and prompted a legal investigation, a fine from the Greek securities watchdog and the resignation of the company’s founders.
In October, a Greek court ruled that the bank accounts of the Koutsolioutsos family, Folli Follie’s founders, and other incumbent and former board members and executives should be frozen.
The charges were laid against Dimitris Koutsolioutsos, founder of Folli, his wife and his son George Koutsolioutsos, who was the CEO of the company and a member of its board, the judicial source said.
Charges were also laid against Folli’s chief financial officer, the chief of accounting, the head of its Asian operations and three other board members, the source added, saying that the prosecutor also ordered that all of the persons charged not be allowed to leave the country.
Two lawyers representing the founder and the CEO were not immediately available for comment. A spokesperson for the company was also not available for comment.
Folli has previously said the claims in the hedge fund report were unfounded and misleading.