HONG KONG, May 25 (Reuters) - Samsonite International , the world’s largest luggage maker, said criticism of its accounting practices in a short-seller report were “one-sided” and “misleading”, and it reserved the right to take legal action.
Blue Orca Capital issued a report on Thursday saying Samsonite had questionable accounting practices and poor corporate governance, sending shares of the luggage maker plunging 10 percent prior to a trading halt.
Shares are due to resume trade on Friday.
The short seller said the owner of the Tumi brand had concealed slowing growth through debt-fuelled acquisitions and had used accounting methods to massage earnings and inflate profit margins. It valued Samsonite at HK$17.59 a share, 43 percent below its last traded price of HK$30.70.
“The company is of the view that the allegations in the report are one-sided and misleading, and accordingly, the conclusions drawn in the report are incorrect,” Samsonite said in a filing to the Hong Kong stock exchange.
Samsonite said Blue Orca’s opinions might not be aligned with those of shareholders and might be intended to undermine confidence in the firm and its management.
“We intend to draw a line under this matter as quickly as possible, and move on to focus on what is important – the future growth of our business,” Chairman Timothy Parker said in a separate statement.
The luggage group said it would provide additional information in due course. (Reporting by Donny Kwok; Editing by Anne Marie Roantree and Edwina Gibbs)