In a dramatic takedown by a short seller of a world-famous brand’s top leader, Samsonite’s chief executive resigned after an attack on his credentials and the company’s corporate governance.
The world’s largest luggage maker said CEO Ramesh Tainwala has stepped down and said the resignation was in the company’s best interest after its board reviewed Blue Orca Capital’s allegations that Mr Tainwala falsified educational credentials. Chief financial officer Kyle Francis Gendreau has taken over as CEO.
The company also released a detailed rebuttal of Blue Orca’s allegations of accounting lapses and poor corporate governance.
Investors sent Samsonite’s stock to its biggest gain in more than six years, jumping almost 10% in Hong Kong as trading resumed after a week-long halt. The stock had plunged 21% last week after the report was issued, erasing €1.1bn from its stock market value.
Terry Hong, an analyst at Guotai Junan Securities, said the departure removes risks for investors. “The company has provided a very strong clarification with solid evidence,” he said. “It will help investors rebuild confidence on the financial performance of the company.”
The short seller’s attack on the dominant player in the €16bn luggage market claims a CEO who has helped the company grow through acquisitions since taking the helm in 2014.
The accusations have dented Samsonite’s shares after almost doubling over the past two years to a record in April.