Blue Orca, founded by former Glaucus Research Group research director Soren Aandahl, questioned related-party transactions between Samsonite and Indian entities controlled by Tainwala and his family, and a revolving door of auditors at the luggage maker's South Asia unit.
In a dramatic takedown by a short seller of a world-famous brand's top leader, Samsonite International SA's chief executive officer resigned after an attack on his credentials and the company's corporate governance. The episode marks an explosive start for Blue Orca, which only announced its launch on May 17. They were suspended for most of this week at the company's request.
Timothy Parker, chairman of the company, in a statement said 'While the board notes that since the company's IPO in 2011, its disclosure of Ramesh's educational background has been accurate, the board also takes seriously the allegation that has been made about his academic credentials.
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It said his resignation was "in the best interests of the company and its shareholders". He told Reuters last week the firm maintained a "very high standard" of accounting and that "every allegation.is mischievous and false". Tainwala's resignation lends credence to the report, which does not focus exclusively on Tainwala's conduct, but also on wider company financials.
Tainwala has been replaced by Kyle Francis Gendreau, the Chief Financial Officer of the company. "We suspect that Samsonite has concealed slowing growth through debt fueled acquisitions and that it has massaged earnings and inflated margins through highly questionable purchase price accounting", the short-seller asserted in a 48-page report. The company also released a detailed response to the report by short seller Blue Orca Capital LLC, repeating that the allegations are "one-sided and misleading" and the "conclusions drawn in the report about the company and its financial results are incorrect".
The Blue Orca report found that Tainwala's degree in business administration from the Union Institute and University in Cincinnati had frequently been cited in online biographies and other documents, including in Wall Street Journal and Bloomberg databases.
Tainwala is not the first to leave an executive post over resume issues.
He added, "I have full confidence in Ramesh's capabilities as CEO, and in the broader management team".