elumeo SE: After protests in Bangkok: Furious employees help themselves to company property - New bad news for German jewelry dealer - FPM invests in elumeo for Norwegian State Fund

Berlin / Bangkok - Former employees of the Thai jewelry manufacturer PWK have entered, assisted by the Thai Police, the factory building in Chanthaburi province, which was closed due to a lack of liquidity, and have identified and secured company property, based on a Thai Labor Court order issued June 12, 2019. PWK is a subsidiary of elumeo SE, a jewelry retailer that has made negative headlines. The angry workers, who had been deprived of their legally required severance pay, had obtained a Writ of Execution, from the Thai Courts. This gives them the right to enter the company's premises and "confiscate and sequestrate the assets" as compensation for the unpaid compensation and salaries. Days earlier, some of the once more than 600 bruised Thai employees had protested against the management of elumeo SE and its supporters in front of the German embassy in Bangkok and in front of the PWK company building in Chanthaburi province, also paying their respects to a former worker, which was dismissed and unpaid, the 39 years old Miss Pranee Ngampanya, mother of a small child. She lost her life on August 15, 2019, being unable to pay for her medical care and unable to profit from the social insurance plan.

For the elumeo management under the chairman of the board, Wolfgang Boyé, this is another bad news. As already reported several times in the media, the jewelry retailer elumoe SE, which sells jewelry via the TV and Internet channel "Juwelo", had set up a jewelry factory in Thailand. The capacity of the factory was originally designed for 2 million pieces of jewelry per year. However, the distribution of the jewelry via TV and the Internet fell far short of expectations. The management under the former Scholz & Friends ad-man Wolfgang Boyé steered the company "elumeo SE" with its sales subsidiary "Juwelo GmbH" into an economic crisis. Under Boyé, turnover collapsed, and the share fell into the penny-stock segment. But instead of properly dismissing workers in Thailand and paying them the statutory severance pay, Wolfgang Boyé tried to drop all responsibility on PWK's local Directors, asking them to settle all company debts against company assets.

Despite the lack of response in the market, Wolfgang Boyé and his team continued to order jewelry from PWK in Thailand. More than EUR 30 million was shipped from Thailand to Germany. But only a small fraction of the goods was actually paid for. As a result, the jewelry manufacturer PWK could no longer pay its salaries and its creditors. Thus, the leadership of elumeo SE encouraged them to pay the creditors, salaries and electricity bills by selling or offsetting the company assets, however, in an e-mail from Silverline (the company used by elumeo to hold the shares of PWK), the managing directors of the PWK were strictly forbidden from "any sale, transfer or other disposition of any assets of the company at less than market value", making practically impossible for the Directors to settle any debts.

In addition to politicians, police authorities and public prosecutors in Thailand and Germany are investigating Wolfgang Boyé and his co-managers for fraud. elumeo SE also has to defend itself against a multi-million lawsuit. Gems suppliers of the elumeo subsidiary, PWK, already sued the company because they were not paid, among them the big diamond supplier Flawless. Other creditors like Bright Future and G4S are also not paid.

The asset managers of FPM (Frankfurt Performance Management), who prevented the appointment of a special auditor, by voting against this, proved to be an important supporter of the failing elumeo manager Wolfgang Boyé at the last annual shareholder meeting. The auditor was supposed to investigate why the once promising company under Wolfgang Boyé's management was able to go down such a steep slope. The special auditor was also to shed light on the events surrounding the closure of the jewelry manufacturer PWK.

The developments on elumeo SE situation and the treatment of the PWK employees in Thailand will also be of interest by the Norwegian State Fund, the largest state fund in the world. FPM, Boyé's supporters advise the Norwegian State Fund on German equities. After a major investment of NOK 40 million in elumeo in 2015, the shareholding amounted to NOK 2 million in 2018. The fund's investment guidelines are based on the principles of ethical investment. The fund no longer invests in companies that manufacture weapons of mass destruction or violate human and labour rights.

In view of the current events surrounding the jewelry manufacturer PWK, FPM is likely to be in need of explanation not only because of the apparently poor investment in the wobbling elumeo SE, but also because of the gross violation of employee rights at the elumeo subsidiary PWK. It would not be the first time, by the way, that the Norwegians would draw conclusions from this: The Norwegian sovereign wealth fund has ended its participation in the American trading giant Walmart due to the disregard of employee rights.

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Roderich Schaetze
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