21st Nov 2024 12:07
(Alliance News) - boohoo Group PLC on Thursday faced fresh criticism from its largest shareholder, Frasers Group PLC, which said recent changes do not alter its position on removing co-founder Mahmud Kamani from the board.
A spokesperson for Frasers said: "His title might have changed but his grip on the company has not. Recent events, in particular the interim results, lack of transparency, and further supply chain allegations, should leave shareholders in no doubt – Mr. Kamani must go."
Shares in boohoo were up 1.9% at 30.17 pence each in London on Thursday afternoon.
Shares in Frasers were down 2.7% at 717.00 pence each in London on Thursday afternoon.
Earlier on Thursday boohoo named Tim Morris as its new independent chair, a move aimed at strengthening corporate governance as the online fashion retailer faces intensifying pressure from its largest shareholder, Frasers Group.
Mahmud Kamani, co-founder of the Manchester-based parent company of PrettyLittleThing, Karen Millen, and Debenhams, has been appointed as executive vice chair with immediate effect.
The board has separated his former role as chair from his executive responsibilities to allow for the appointment of an independent chair while enabling Kamani to focus on his day-to-day operational duties.
FTSE100-listed retailer Frasers Group, which holds a 28% stake in boohoo, has intensified its campaign to remove Mahmud Kamani from boohoo's board, arguing his leadership has harmed the company's performance.
In an open letter to shareholders on Thursday, Frasers urged a vote for his ousting at an upcoming meeting on December 20. Frasers founder and 73% shareholder Mike Ashley has been pushing to join boohoo's board alongside Mike Lennon, arguing it is the only path to restoring value and stability at boohoo.
Frasers has also accused boohoo's leadership of lacking the transparency needed to address its financial struggles, such as the recent GBP222 million refinancing, while highlighting concerns over declining operational performance, including weaker customer retention and falling order values.
boohoo's board said Kamani has provided several assurances to continue his day to day executive role, which described as "an integral part of the leadership team". Kamani has pledged not to acquire additional shares, merge boohoo with a competitor, or make an offer for the company within the next six months. Kamani has also agreed to waive his salary for the next 12 months.
These commitments are intended to reassure shareholders and underscore the board's efforts to address corporate governance issues.
Chair Tim Morris said: "My appointment follows a series of decisive steps taken by the Board since launching its business review. I am excited to lead boohoo through the next phase of its development, alongside Dan Finley and the wider board, with the focus on delivering maximum value for, and protecting the interests of, all shareholders".
By Eva Castanedo, Alliance News reporter
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