Boohoo names new chair, Frasers steps up pressure to oust co-founder

Another day, another set of developments in the ongoing spat between Boohoo Group and major shareholder Frasers group. So what are those developments? In short, Boohoo has named a new chair and Frasers has called for Boohoo’s co-founder and executive chair Mahmud Kamani to be ousted.

Now for the somewhat longer version. On Thursday, Boohoo’s board “unanimously agreed to appoint Tim Morris as the company’s independent chair with immediate effect”. This follows the earlier announcement of a new CEO, Dan Finley, being appointed and its recent refinancing.

The company said the latest appointment “highlights the board’s commitment to shareholders to continue to uphold high standards of corporate governance”.

Morris will be responsible among other things for overseeing the group’s recently announced business review, (which will be led by Finley). 

Boohoo said his “appointment and experience across legal, governance, business and board advisory, will ensure high standards of corporate governance continue to be upheld”.

Meanwhile Kamani will become executive vice-chair with immediate effect. The board “has decided to divide the role between his executive capacity and his role as the board’s chair, to enable the company to have an independent chair and allow Mahmud to continue his day-to-day executive role. Mahmud is an integral part of the leadership team and is currently focused on the group’s young fashion businesses”. 

Alistair McGeorge will remain as senior independent director, “adding further independence to the board”.

In connection with Morris’s appointment, Kamani has also “reconfirmed his agreement to provide assurances around his relationship with the company as a major shareholder, for the benefit of all shareholders”.

These assurances include (among other points) that he “will have no involvement in the commercial decision-making of any competitor of Boohoo and will not share any commercially or competitively sensitive information with any other party” and that “he has no intention to make an offer for the company [or] to purchase any of its assets”. And for six months from the date of this announcement, he won’t (without the unanimous agreement of the board) acquire any Boohoo shares, debt or other securities or seek to merge Boohoo with a competitor.

Turning to Frasers Group, which controls a chunk of Boohoo shares getting close to 30%, said in an open letter Thursday that “recent events at Boohoo should leave shareholders in no doubt — Mahmud Kamani… must go. Frasers has today requisitioned a further shareholder meeting of Boohoo to give shareholders the opportunity to remove Mr Kamani as a director”.

It also urged Boohoo shareholders to vote to appoint Mike Ashley and Frasers’ nominee Mike Lennon as directors of Boohoo at the shareholder meeting that Frasers has requisitioned and that will happen just before Christmas.

The full text of the letter referred to Boohoo’s “dismal interim results” and emergency fundraise, the “multi-year share price collapse and value destruction”, “further supply chain allegations”, “related-party cronyism” and more.

It also contrasted Boohoo’s share price fall of 93% from its peak and Frasers’ “cumulative total shareholder return” over five years of 122.9%.

And it complained that the appointment of the CEO was rushed, with Finley — who’s successfully leading the turnaround of Boohoo’s Debenhams unit — having “never led a public company”.

Frasers said that if it achieved its aims in ousting Kamani and installing Ashley at the helm of the business, it would “push for total transparency… review Boohoo’s financing arrangements to understand what the terms of Boohoo’s refinancing actually are and consider how best to improve [its] position; [and] bring to Boohoo decades-long retail and logistics expertise and experience”.