The chief executive of luggage-maker Samsonite has resigned following an inflammatory short seller report last week that sent its share price plunging.
Chief executive officer (CEO) Ramesh Dungarmal Tainwala has resigned from the company, citing personal reasons, with immediate effect.
Hong-Kong-listed Samsonite’s share price rose by nearly 15 per cent following the announcement, having taken a battering in the previous week.
Hedge fund Blue Orca Capital published a report last week in which it alleged that Samsonite had "concealed slowing growth... massaged earnings and inflated margins".
"Samsonite should trade at a discount to its peers because of corporate governance concerns regarding its audit profile, dodgy related party transactions between the company and Indian entities controlled by the CEO and his family, and CEO Ramesh Tainwala’s resume fraud of claiming to be a doctor when he is not," Blue Orca claimed.
In a statement today Samsonite thanked Tainwala for his “dedication and many contributions to the success of the group” but noted the allegations made about his qualifications.
“While the board notes that since the company’s IPO in 2011 the company’s disclosure of Mr Tainwala’s educational background has been accurate, the board also takes seriously the allegation that has been made about his academic credentials. In considering Mr Tainwala’s resignation, the board thoroughly reviewed the facts related to this allegation and has determined that accepting his resignation is in the best interests of the company and its shareholders.”
The company has appointed chief financial officer (CFO) Kyle Gendreau as its new CEO with immediate effect.
Gendreau has been a member of Samsonite’s executive committee since 2007 and CFO since 2009.