Samsonite CEO steps down – shares jump
Luxury luggage titan Samsonite made the headlines at the beginning of June as CEO Ramesh Tainwala resigned “effective immediately”. Tainwala’s abrupt exit from the company came after short-selling fund Blue Orca accused him of “resume padding”. The claim he is alleged to have fabricated is that he holds a doctorate in business administration.
Academic fraud is a serious matter, and Samsonite declared that he was stepping down due to “personal reasons”. The upside is that investors overwhelmingly approve of Tainwala’s exit, and the stock jumped 10% since its announcement.
Samsonite’s stock is up 10% in the two weeks since Tainwala stepped down
SOURCE: Yahoo Finance
Samsonite said that its board had “thoroughly reviewed the facts” over Mr. Tainwala’s alleged claim, and that his resignation was “in the best interests of the company and its shareholders.” Tainwala will be succeeded as CEO by Samsonite’s chief financial officer and longtime Samsonite employee Kyle Gendreau.
According to The Wall Street Journal, Tainwala admitted to not having a doctorate (he claims to have enrolled in a PhD program in 1992, but never completed it) and “reportedly asked colleagues not to refer to him as ‘Dr.’” Nonetheless, the publication found the doctorate designation “included in at least two regulatory filings with the U.S. Securities and Exchange Commission more than a decade ago and some regulatory filings in India.”
Accusations against Tainwala were part of a longer hit-piece by Blue Orca, which Samsonite explicitly refuted. Separately to their announcement of Mr. Tainwala’s departure, they dealt with accusations leveled at the company, saying they had “determined that these allegations in the Short-Seller Report about the Company are one-sided and misleading, and that the conclusions drawn in the Short-Seller Report about the Company and its financial results are incorrect. Furthermore, the Company's financial disclosures are an accurate reflection of the strong core fundamentals of the business.”
Dominion holds Samsonite in its Global Trends Luxury Fund.
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