Puma forced into writedowns after fraud claims at Greek joint venture

 
City A.M. Reporter
GERMAN sporting goods maker Puma said yesterday it would bring criminal charges against its partners in a Greek joint venture after discovering an alleged swindle that could cost it as much as €130m (£115.3m).

Puma said it suspected that its “Greek joint venture partner, along with members of the Greek local management, has committed a series of criminal acts” based on the preliminary findings of an audit.

“This is about systematic evasion and embezzlement,” said Puma chief executive Jochen Zeitz.

He said it was not yet clear how much Puma would seek in damages from its partners, brothers Georgious Glou and Antonius Glou, who own 15 per cent each of the Puma Hellas venture.

Officials at Glou, a non-listed Greek clothing retailer, declined to comment.

The two brothers did not immediately return a phone call to their office seeking comment.

Greece is one of Puma’s ten biggest European markets, with annual sales in the tens of millions of euros.

“In the long term, Greece is an important market for us,” Zeitz said, but added that Puma would shrink its Greek business -- under new management – to reflect tough economic conditions in the southeastern European country.

Greece’s economy has been pummeled as the debt-choked country tightens its belt to slash its sky-high budget deficit.

The unemployment rate there has risen to 12 per cent and is set to head to more than 14 per cent next year. Zeitz said Puma, which is controlled by France’s PPR will exercise an option to take over the Glou brothers’ 30 per cent of Puma Hellas and gain full control of the business.