LONDON (Alliance News) - Globo PLC said Monday that Chief Executive Officer Costis Papadimitrakopoulos and Chief Financial Officer Dimitris Gryparis both have resigned, and a board has been set up to "ascertain the true financial position of the company".
Additionally, Chief Operating Officer Gerasimos Bonanos has been suspended from his duties with immediate effect, pending the outcome of investigations, it said.
The announcement follows a report published by New York-based hedge fund Quintessential Capital Management last week in which it said it had collected "overwhelming evidence suggesting the existence of what appears to us a large-scale conspiracy to deceive investors and creditors through pervasive and systematic accounting manipulation."
Globo last Friday said it refuted "all allegations" made in the report, and requested its shares be suspended from trading in order to give it more time to provide a more detailed response.
An emergency board meeting was held on Saturday to discuss the allegations in the report and to "ascertain the actions that would be required to resolve the matter", the company said. At this meeting Papadimitrakopoulos "brought to the attention of the board certain matters regarding the falsification of data and the misrepresentation of the company's financial situation, and offered his resignation", as did Gryparis, Globo said on Monday.
Following the meeting and legal advice, a committee was set up consisting of non-executive directors only, which accepted the resignations. "All of the executive directors have agreed to make themselves available and fully co-operate with any investigations," Globo said.
The committee has begun talks with appropriate advisers in relation to the "next steps" and to ascertain the company's "true financial position", it said, and has additionally asked the company's lawyers to notify the matter to the appropriate authorities, and informed its principal bankers.
Globo also said that Papadimitrakopoulos had informed the company that up to last Thursday he has sold 42.05 million shares in the company, and pledged 10 million shares under a personal loan agreement with Lantau Holdings Ltd - a loan that will default at close of business Monday due to two consecutive days of the suspension of the company's shares from trading.
At Globo's last quoted price before suspension of 29.45 pence, the share sale would amount to GBP11.9 million.
This means Papadimitrakopoulos' holding in the company has been reduced from 18.67%, or 69.78 million shares, to 7.42%, or 27.73 million shares. Globo noted that it has requested additional details about these dealings, and does not yet "possess all relevant information about their timing and nature." It will make a further announcement once this information is received.
Prior to the share suspension, Globo had a market capitalisation of GBP105.6 million.
Globo's joint corporate broker Canaccord Genuity Ltd has resigned with immediate effect.
By Hana Stewart-Smith; hanassmith@alliancenews.com; @HanaSSAllNews
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