Crisis-hit Revolution Beauty has threatened to sue its co-founder and former chief executive, alleging he breached fiduciary and other duties, and is seeking to recover “material sums” in related costs.
The retailer, which listed on the junior Aim market in 2021 with a market capitalisation of almost £500mn, said on Tuesday it sent a letter to Adam Minto ahead of its forthcoming annual shareholder meeting, alleging he had breached his fiduciary, statutory, contractual or tortious duties to the company.
Some of the matters, the company added, contributed to Revolution Beauty’s failure to deliver its audited accounts by the deadline last year, and led to its shares being suspended in September.
Minto did not immediately respond to a request for comment.
“The company is looking to recover material sums relating to the exceptional costs the company incurred as a result of the matters alleged,” the retailer said in a stock market announcement.
Revolution Beauty said it had not received a substantive response from Minto or his representatives. It has set a deadline of July 7 for a response.
The company sells its affordable make-up online and via retailers including Superdrug in the UK and beauty chain Ulta in the US.
A recent investigation into its accounts uncovered a series of issues, including overstating sales by £9mn. It also emerged that co-founders Minto and Tom Allsworth made personal loans or other investments of approximately £1mn without the board’s knowledge. They each sold shares worth about £15.6mn at the flotation price of 160p.
The announcement comes a day after its largest shareholder — fast-fashion group Boohoo — said on Monday that it was seeking to oust the current management of Revolution Beauty and install its own candidates at the helm of the company.
Boohoo said it was grateful to its most senior executives for stabilising the business, but added that “the focus must switch to growth” as Revolution Beauty recovers from the accounting probe.
Minto resigned as chief in November, followed by Allsworth in May.
