Samsonite, the world’s largest luggage producer, said that former CEO Ramesh Tainwala will be resigning after a report by a U.S. based short selling firm, Blue Orca, that claimed he had falsely claimed to have a doctorate degree in business administration on his résumé. The resignation is in effect immediately and the position will be replaced by Kyle Gendreau, Chief Financial Officer of Samsonite.
In the filing report, Blue Orca claimed Tainwala held himself as a doctor throughout many times in his career, citing examples which included a profile on the Bloomberg website, Stock Exchange Committee filings, and other company materials that referred to Tainwala as having a doctorate degree. They also claimed that Tainwala had actually enrolled in a doctorate program, but never completed it to receive a degree.
Although these allegations have not been proven, Tainwala stepped down, citing “personal reasons” according to the company. Samsonite said its board “thoroughly reviewed the facts” related to the claims about the validity of his educational background and has decided that accepting his resignation was in the best interest of the company and its shareholders.
After Blue Orca released their accusations, Samsonite shares plummeted 21% over two days in the Hong Kong exchange. Following this drop, the company requested they be suspended for most of the week and resumed trading on Friday, ending the day roughly 10% higher.
Morningstar, an investment firm, believes Samsonite shares are worth about 35% more than its current price and suggests its clients should buy them. Lorraine Tan, an analyst at Morningstar, says, “it will take the stock some time to recover fully.”
In a statement to The Wall Street Journal, Tainwala said he has never claimed to have a doctorate degree, but that his friends and colleagues referred to him as a “doctor” simply as a joke because they knew he had not completed his studies.