Samsonite CEO Ramesh Tainwala has stepped down after being accused of lying on his resume about having a doctorate.
The luggage maker said in a statement to the Hong Kong stock exchange on Friday that Tainwala resigned for personal reasons, which Samsonite’s board decided was in the best interests of the company and its shareholders.
A research report issued by US-based short-seller Blue Orca a week earlier said Tainwala had falsely claimed on his resume that he earned a doctorate degree in business administration from Union Institute and University in Cincinnati.
Ousted: Samsonite CEO Ramesh Tainwala, 58, has stepped down after being accused of lying on his resume about having a doctorate
Samsonite said its board took the allegations seriously but added it had accurately disclosed Tainwala’s educational background since it went public in Hong Kong in 2011.
The company’s latest annual report did not refer to him as a ‘Dr’ but Blue Orca said it found such references in US filings dating from before the company was delisted from US trading more than a decade ago, in Indian filings and during one earnings call with analysts after its Hong Kong IPO.
Tainwala, 58, became CEO in 2014. He joined the company in 1995, after working in India’s plastics industry. He will be replaced by Samsonite’s chief financial officer, Kyle Gendreau.
The 49-year-old Gendreau has been Samsonite’s CFO since early 2009. Before joining the company he worked in various financial roles at firms including venture capital-backed start-up Zoots and catalog retailer Specialty Catalog Corporation.
Blue Orca also alleged Samsonite played ‘accounting games’ related to its 2016 purchase of luxury baggage maker Tumi.
Samsonite, which is one of the few major foreign stocks listed in Hong Kong, now valued at around $4.9billion, said last month net profit surged 19 per cent and revenue jumped 21 per cent in the first quarter, led by robust sales of its Tumi brand products.
Samsonite called the 48-page report ‘one-sided and misleading,’ and said the conclusions about its financial results were incorrect.
Tainwala’s resignation comes a week after US-based short-seller Blue Orca issued a critical report, which the CEO previously dismissed as ‘false’
Founded in 1910, the luggage maker Samsonite is now valued at around $4.9billion
Tainwala told Reuters last week the firm maintained a ‘very high standard’ of accounting and that ‘every allegation … is mischievous and false.’
Blue Orca’s report was its first after it was founded earlier in May by Soren Aandahl, formerly the chief investment officer at another short-seller, Glaucus Research.
Investors who ‘short’ stocks profit by betting that their prices will fall.
Luxembourg-based Samsonite’s Hong Kong-listed shares, which had tumbled on the report, jumped more than 7 per cent after the announcement.
The company was founded in Denver in 1910 and family owned until the 1970s, when various investors and private equity groups took over. It listed its shares in Hong Kong to better capture growth in the Chinese consumer market.