Tuesday, September 17 2019

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elumeo SE: Another lawsuit against Berlin jewelry trading group / Shareholders speak of "destruction" of subsidiary PWK - Norwegian Pension Fund reviews investment in elumeo SE

Update: September, 13/2019 - 02:21

BERLIN, GERMANY / CHANTHABURI, THAILAND - EQS Newswire - 13 September 2019 - The problems of the Berlin jewelry retailer elumeo SE (the owner of Juwelo TV), which has been caught in the negative headlines, are on the increase: an action for annulment and rescission could render null and void the resolutions passed at the Shareholder Meeting on August 7th, 2019. What's more, shareholders feel that the management under Wolfgang Boyé has told falsehoods to them, especially about the jewelry manufacturer PWK in Thailand, which has run into financial difficulties. In the complaint, they refute the claim that PWK had sufficient funds to pay the salaries and severance payments of over 600 Thai employees. The public prosecutor's office in Berlin, the police and authorities in Thailand are investigating the chairman of the board of directors of elumeo SE, Wolfgang Boyé and the managing directors Thomas Jarmuske and Bernd Fischer for fraud.



Workers of the jewelry manufacturer PWK Jewelry Company Limited and representatives of the Ministry of Labour met the governor of the Thai province Chanthaburi. More than 600 PWK workers became unemployed after the German jewelry retailer elumeo SE ordere.


The action for annulment and rescission filed by anchor shareholder Ottoman Strategy Holdings (Suisse) S.A. against elumeo SE, which also distributes its jewelry via the TV channel "Juwelo TV", addresses the "'destruction" of the group's own production facility in Thailand. Through its subsidiary "Silverline" in Hong Kong, elumeo SE had ordered jewelry worth over EUR 30 million from the other subsidiary PWK Jewelry Company Ltd in Thailand. Elumeo paid only a small fraction of the amount, which ultimately led to the financial collapse of PWK's own subsidiary. As a result, over 600 Thai employees lost their jobs, with no salary payments and no statutory severance payments. The elumeo management had discussed in advance about ways of getting rid of Thai employees without having to pay statutory severance pay.


The shareholder's accusation: "The defendant (elumeo SE) is in economic difficulties due to years of mismanagement by the Chairman of the Board of Directors and the Executive Directors. According to the plaintiff, the members of the Board of Directors - first and foremost the Chairman of the Board of Directors and the Managing Directors he manages - are concentrating on securing their own positions, rather than on the asset interests of the entire elumeo Group and its shareholders. This culminates in unlawful acts by the members of the Board of Directors against the group companies Silverline Distribution Ltd., Hong Kong, PWK Jewelry Company Ltd., Bangkok, as well as the directors and other guarantors working there, which deliberately and intentionally represent an intervention threatening the existence of the group companies and who have crossed the threshold of criminal liability in accordance with the principles of the decision of the Federal Court of Justice of 13 May 2004, ref. no.: 5 StR 73/03.".


The Berlin public prosecutor's office, which is investigating Wolfgang Boyé and the managing directors Thomas Jarmuske and Bernd Fischer for fraud (file number 242 Js 540/19), seems to agree with this, as do the police authorities in Thailand (file number 0050/2562).


As the business newspaper "Handelsblatt" reported, the "destruction" of the Thai jewellery manufacturer PWK had partly drastic consequences for the employees and their families. An employee, a young woman - mother of a child - fell ill and was unable to finance the necessary medical treatment. The mother died. Friends and relatives had to collect money for a burial according to Buddhist rites. Outraged PWK employees protested before the German Embassy in Bangkok against the German company elumeo SE and its managers. Wolfgang Boyé, Chairman of the Board of Directors, told the "Handelsblatt" that he felt that the emotional protest was putting him under undue pressure."


Again and again, the Thais, who were put in financial distress by their parent company, called on elumeo SE to return at least a part of the jewellery worth more than 30 million euros to Germany so that salaries, severance payments and creditors could be paid. But the German managers refused. The complaint states: "Nevertheless, they do not shy away from deliberately "jumping over the blade" their group company and their employees.


elumeo SE is currently having to defend itself against a multi-million lawsuit filed by PWK, via its assignee SWM Treuhand AG. In addition, suppliers of the elumeo subsidiary PWK have also sued the company because they were not paid, including such large diamond suppliers as Flawless. Other suppliers such as Bright Future and G4S were also not paid.


The lawyers of the shareholder OSH accuse the Chairman of the Board of Directors Wolfgang Boyé of "deliberately and ruthlessly" violating the requirements of responsible and transparent corporate governance and the values, principles and rules of responsible corporate management.


In spite of all this, Frankfurt Performance Management and other minor shareholders of elumeo SE, refused OSH's request for appointment of a special auditor with the mandate to audit and clarify the actions of Wolfgang Boyé and its Managers Thomas Jarmuske and Bernd Fischer. This is surprising and troubling for anyone who has the desire to understand what hides behind all this potentially criminal activity and makes one wonder what the real and ultimate reasons of shareholders are refusing an audit over the management of a criminally investigated Chairman.



This fact has now attracted the attention of the Norwegian pension fund, the largest sovereign wealth fund in the world, which prides itself on investing only in ethically correct companies. The Norwegian pension fund bought shares in elumeo SE through its German licensee, FPM (Frankfurt Performance Manager).


Not only did the Norwegians have to learn that the management of elumeo SE had sent the company into a rapid downturn through mismanagement, but they also disregarded the fundamental rights of dependent Thai employees for low motives. The ethically correct Norwegians, who are already informed about the elumeo SE case, had earlier dissolved their investments with the US trading giant WalMart. There, too, the rights of the employees were disregarded.


Roderich Schaetze, Rechtsanwalt, Steuerberater, Wirtschaftsprüfer

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