Shanghai/Hong Kong: Samsonite International SA said CEO Ramesh Tainwala had stepped down, leaving less than a week after a short-seller attacked accounting practices that involved entities owned by his family and accused him of resume padding.

The world's largest luggage maker said Tainwala had resigned for personal reasons but its board took seriously allegations about his academic credentials and his departure was "in the best interests of the company and its shareholders".

Tainwala, a postgraduate from the Birla Institute of Technology and Science (BITS), Pilani, grew up in Ranchi, Jharkhand.

Starting out as a small commodity trader in the early 1980's through Tainwala Trading & Investments, he soon became a vendor for major luggage makers such as VIP, supplying the companies with raw material and, later, plastic sheets.

Years later, Tainwala Group and Samsonite entered into a 40-60 joint venture called Samsonite South Asia to manufacture international quality luggage in India. The JV continued with a professional board, while Tainwala focused on Samsonite's global operations. Including the Samsonite JV, the Tainwala group had a total turnover of Rs 1,500 crore, as of 2013-14.

More clarification

On Friday, Samsonite has also issued a nine-page response to other allegations made by new short seller Blue Orca, repeating its stance that the report was one-sided and misleading. It added its auditor KPMG had not withdrawn its audit opinions, nor indicated it would do so.

Analysts praised the swift action but it remains to be seen if Samsonite has done enough to resolve the issue. Its shares surged 12 per cent on Friday but are still down more than 10 per cent since the attack.

"While the company is viewed as having made the right move with the management reshuffle, it could lead to some uncertainty," said Linus Yip, chief strategist at First Shanghai Securities.

He added Tainwala's departure may suggest to investors that some allegations were true and the share rally could be short-lived.

Tainwala did not immediately respond to a request for comment on Friday. He told Reuters last week the firm maintained a "very high standard" of accounting and that "every allegation ... is mischievous and false".

Blue Orca, which was launched last month by Texas-based short-seller Soren Aandahl, did not respond to a request for comment.

Chief financial officer Kyle Gendreau, 49, will take the helm with immediate effect.

He 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.

Based in Massachusetts, Samsonite is one of the few major foreign stocks listed in Hong Kong, alongside Prada and cosmetics firm L'Occitane International. It acquired the Tumi brand in 2016. Reuters

The firm, now valued at around $4.9 billion, said last month its 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.

Prior to the Blue Orca report, the average recommendation from 14 analysts on the shares was a "buy", Thomson Reuters data showed. Its shares hit a record high of HK$38.60 in April amid expectations of further improvement in the luxury retail sector.