Boohoo urges vote against Frasers’ motion to remove founder
In a new update, Boohoo said its board formed an independent committee composed of all directors other than Kamani to consider the recommendation
Boohoo has published a new letter urging shareholders to vote against an upcoming motion to remove Mahmud Kamani as director, following a demand by Frasers to oust the founder.In a new update, Boohoo said its board formed an independent committee composed of all directors other than Kamani to consider the recommendation.
It comes as shareholders voted against Frasers’ attempt to appoint Mike Ashley and restructuring expert Mike Lennon to the board last month, with 63% of shareholders voting against the move.
In a new open letter to shareholders, Boohoo said: “Frasers’ demands, including its current attempt to remove Mr Kamani as a director of the company, form part of an ongoing campaign by Frasers which appears designed to destabilise Boohoo and disrupt the board’s plans to unlock and maximise Shareholder value through the business review that it announced in October.”
It added that Frasers was “acting solely in its own commercial self-interest”, and that this was “another tactical move on its part intended to distract the board from the important work of its business review and to destabilise Boohoo for Frasers’ own benefit as a trade competitor, regardless of its impact on the company’s other shareholders”.
Boohoo’s letter also said that Kamani was an “integral” part of Boohoo’s leadership team, and the independent committee believes he should remain in his “critical” role.
In addition, the letter noted that proxy advisor Institutional Shareholder Services (ISS) also urged shareholders to vote against Frasers’ demands.
Last November, Frasers openly called for Boohoo shareholders to oust Mahmud Kamani from the company and instead appoint Mike Ashley to the board, citing that “urgent change is needed” at Boohoo following its latest “dismal” results.
In an open letter to shareholders, the Mike Ashley-owned group, which is a majority shareholder of Boohoo, continued what has been an ongoing public feud between the two groups over Boohoo’s governance.
The letter noted that Boohoo’s board of directors have been asked to remove Kamani, saying “recent events, in particular the results, lack of transparency and further supply chain allegations, should leave shareholders in no doubt – Mr. Kamani must go”.
Boohoo had raised “concerns” over Frasers’ behaviour in a previous open letter to Frasers, again accusing the group of “commercial self-interest”.
This followed Frasers seeking stronger involvement in Boohoo’s strategic review, with Boohoo calling the move “inappropriate” due to the fact Frasers is a trade competitor and not an independent shareholder in the online retailer.
Frasers had previously called on Boohoo to appoint Ashley as director and CEO of the struggling online company, after slamming the “continued incompetence” of the current Boohoo board amid an “abysmal” trading performance.
In another open letter to Boohoo, Frasers urged the company to remove outgoing CEO John Lyttle as director and appoint Ashley as chief “without delay”, adding that his appointment would be in the “best interests of the company, its shareholders and its stakeholders”.
