Boohoo has offered its largest shareholder, Frasers Group, a seat on its board – but not for the retail tycoon Mike Ashley, Frasers’ founder.
The fast fashion retailer said on Friday it was willing to have “constructive” talks about Frasers joining its board. But it said current nominees Ashley and Mike Lennon, a restructuring expert, would have “irreconcilable conflicts of interest”.
Boohoo has been subject to a campaign by Frasers’ boss and Sports Direct founder Ashley to get himself installed as its chief executive in recent months.
That was cut short when Boohoo appointed Dan Finley, former boss at Debenhams, which it owns, in November. Ashley then reverted to trying to get a board seat instead, which Boohoo has also resisted.
Frasers claimed in a letter on Thursday that Boohoo’s opposition to Ashley and Lennon joining the board was because of fears they would “dilute” the influence of co-founder Mahmud Kamani.
The retail conglomerate has also said it is trying to protect minority shareholders from a potential plan by Boohoo bosses to break up the company as part of a turnaround effort.
Frasers has a 27% stake in Boohoo and has forced an emergency shareholder meeting to vote on the matter on 20 December.
In a statement on Friday morning, Boohoo said the letter indicated Frasers was taking a “selective approach” to shareholder protection.
“When it comes to protecting minority shareholders, Frasers will decide which commitments it wishes to give and on what terms,” it said.
The Boohoo chair, Tim Morris, said Ashley and Lennon were “not appropriate candidates to join the board in any circumstances” because of “obvious conflict points”.
“Notwithstanding that, Frasers continues to refuse to agree to a number of the key protections that the board would require should an appropriate representative be nominated.
“These are key issues which need to be addressed for the protection of all shareholders and it is not for Frasers to pick and chose which commitments it will give.”
A Frasers spokesperson said on Friday: “We made clear that Mr Ashley and Mr Lennon will sign up to all market-standard and customarily accepted governance protocols and have gone above and beyond in this respect.
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“Shareholders now have to decide if they want to benefit from the huge value they can bring in supporting Dan Finley or not to bring substantial value to Boohoo shareholders.”
Earlier this month, a prominent shareholder advisory firm, Institutional Shareholder Services (ISS), urged Boohoo investors to reject Ashley’s bid for a seat at the meeting on 20 December.
Earlier this month, Ashley also criticised Kamani for being an “egotistical founder who has an unhealthy grip on the board”.
He also said Boohoo was “in desperate need of the guidance I can provide”.
Ashley warned against a turnaround that resulted in the “fire sale of assets at knockdown prices”, including the Debenhams brand, which he said should not be sold.
