It'S Not Good To Do False Accounts. Folli Follie Was Fined 20 Million 300 Thousand Euros.

There was no good end to false accounts, and Folli Follie and many executives of Greek fashion jewelry and accessories were again punished.

Hellenic Capital Market Commission (referred to as HCMC), the Greek capital market committee said on Thursday that Folli FollieCommercial Manufacturing and Technical SA (FFGRP.AT) Fu Li (Liv) fined 20 million 300 thousand euros for the company and 10 former and incumbent executives in the 2016 fiscal year.

This is the second time since May 2018 when Greek retailers were fined for financial fraud by Quintessential Capital Management LLC (QCM), the US hedge fund.

At the beginning of August last year, HCMC fined 4 million 20 thousand euros for nine executives and board members of FF Group's then Dimitrios Koutsoulioutsos and then CEO GeorgeKoutsolioutsos's father and son, because they did not provide data for 242 million 500 thousand euros of cash reserves in 2017's financial statements, allegedly manipulating the stock price by using false or misleading information.

The first 4 million euro fines were badly dissatisfied with investors, because the financial data of Greek companies were seriously exaggerated.

At the end of September 2018, reports released by independent audit institutions showed that the situation of FF Group's counterfeiting was very staggering. In the 2017 fiscal year, Asia's core businesses were all exaggerated. Among them, the income of the Group Asia Pacific market was exaggerated by ten times. In 2017, the audit revenue was 116 million 800 thousand dollars, while the company reported 1 billion 112 million 300 thousand dollars in the earnings report, the stock fraud was the index, and the 33 million 874 thousand dollar stock was exaggerated to 581 million 700 thousand US dollars.

The fraud of profit and cash flow is more insane. By the 2017 financial year preliminary audit report completed by Alvarez& Marsal and EY, Ernst & amp; young pointed out that as at the end of fiscal year 2017, the cash balance of FF Group Asia business was only 6 million 400 thousand dollars, and recorded a loss of 44 million 700 thousand dollars, while the original earnings claim that the cash balance and profit reached 296 million 800 thousand US dollars and 316 million 400 thousand US dollars respectively.

FF Group, an anonymous management, said last week that the company, which is deeply involved in financial fraud, is reorganizing negotiations with three creditors and is expected to conclude a deal within a few days to determine the restructuring plan.

The suspension of FFGroup for eight months is still at 4.80 euros in May 24, 2018, with a market capitalization of only 318 million 400 thousand euros, and the company is facing an expiry of 430 million euros. Although the group is trying to sell part of its real estate business, it is still difficult to make up for its debt. If the company wants to avoid bankruptcy, it needs further financing to supplement its operating costs.

In addition, because of the huge scandal of financial fraud, insiders from the company say that most FF Group suppliers hope that Greek companies can make payment in advance, or suppliers refuse to deliver.

In February 14th, on the Western Valentine's day, FF Group announced that it had approved an updated clause to restructure the company with the debentures. On that basis, Greek companies would extend invitations to all creditors to reach a restructuring agreement in accordance with the proportion of creditors stipulated by law.

Greek company insiders told Reuters on Friday that, in addition to closing to a restructuring agreement, the company is also negotiating with Asset Management Co Kyma Capital, Oasis and MercierVanderlinden on business reform and financing, and 27% of FF Group's 249 million 500 thousand euro debt expires this year belongs to the three companies mentioned above.

If FF Group appeals to recover more than 100 million euros of assets frozen, sources said the three creditors may provide 41 million euros of financing to Greek companies, while creditors will take 67 million euros from total assets and eventually acquire 80% of Greek group's shares.

However, the restructuring plan requires at least 2/3 of shareholders and creditors to approve.

According to sources, it is expected that FF Group will be able to complete its audit report in fiscal year 2017 at the end of March, and then the approved restructuring plan will be approved by the court's audit room. It is expected to be submitted to the court at the beginning of April, but the court approval may take several months.