Frasers Group has today published an open letter to Boohoo Group shareholders, urging that founder and executive chairman Mahmud Kamani must be replaced by Mike Ashley.
Stepping up its boardroom battle with Boohoo, the company wrote: “A simple choice: win with Mike Ashley or lose with Mahmud Kamani.”
It urged Boohoo shareholders to vote to appoint Ashley and restructuring expert Mike Lennon as directors at its shareholder meeting on 20 December.
Frasers Group emphasised that these appointments and Kamani’s removal were “in the best interests of Boohoo, its shareholders and its stakeholders”.
It labelled Boohoo’s recent results and refinancing as a “catastrophe”, adding that things are “far worse than shareholders could ever have imagined”.
“Recent events, in particular the results, lack of transparency and further supply chain allegations, should leave shareholders in no doubt – Mr. Kamani must go,” the letter continued, whilst campaigning for Ashley – “a proven retailer with an outstanding track record for value creation” – to be appointed as his replacement.
It comes as Boohoo today announces that Non-Executive Director Tim Morris has been appointed as the company’s independent Chair with immediate effect.
Mahmud Kamani has become Executive Vice Chair, allowing Boohoo to have an independent Chair and Kamani to continue his day-to-day executive role.
The appointment follows a series of decisive steps taken by Boohoo since announcing its business review, including the completion of the refinancing, the appointment of Dan Finley as Group CEO, and the fundraising of c.£39.3 million.
In his role as Chair, Morris will be responsible among other things for overseeing the group’s recently announced business review, which will be led by Finley.
Morris said: “I am excited to lead Boohoo Group through the next phase of its development, alongside Dan and the wider board, with the focus on delivering maximum value for, and protecting the interests of, all shareholders.”
The news comes amid an ongoing spat between Boohoo and Frasers Group, with the former previously urging investors to reject Ashley’s bid for a board seat at a shareholder meeting,
Frasers had requested a board seat to “protect shareholder value”, expressing concerns that Mahmud Kamani may reacquire the company’s assets at a discount.
However, Boohoo responded stating that it is “concerned that Frasers is using its significant shareholdings in UK retailers, including Boohoo, to further its own self-interest at the expense of other shareholders”.
Boohoo said it has a “credible plan to unlock and maximise value for the benefit of all shareholders” under the guidance of new boss Dan Finley and warned of the risks posed by rival Frasers’ influence.
