Boohoo urges shareholders to vote against Mike Ashley board appointment
By Josh White
Date: Friday 13 Dec 2024
(Sharecast News) - Boohoo's board responded to the latest chapter in its dispute with Frasers Group on Friday, opposing the latter's desired board appointments, citing what it called "irreconcilable conflicts of interest" and accusing Frasers of selectively addressing governance requirements.
The online fashion retailer reiterated its willingness to grant Frasers a board seat if a suitable, independent candidate is proposed, but it categorically rejected the appointments of Mike Ashley and Mike Lennon.
Proxy advisory firms Glass Lewis and ISS had also recommended shareholders vote against the resolutions.
Boohoo emphasised that Mike Ashley's ties to Frasers, which it called a significant competitor, posed risks despite assurances from Frasers that conflict protocols were in place.
Shareholders are set to vote on the appointments of Ashley and Lennon at a general meeting on 20 December.
Frasers, which holds a minority stake in Boohoo, accused the online fashion retailer's leadership, particularly executive vice chair Mahmud Kamani, of resisting necessary changes to address Boohoo's financial struggles.
It contended that Ashley could bring retail sector expertise to Boohoo's board, supporting chief executive officer Dan Finley in reversing the company's declining shareholder value.
In an open letter published on Thursday, Frasers claimed it had agreed to adopt all "market-standard" governance commitments to mitigate conflict concerns, but criticised additional conditions demanded by Boohoo as excessive and unprecedented.
Frasers also dismissed allegations of competitive conflicts involving its other investments, such as Asos and House of Fraser, arguing that overlaps were minimal and manageable.
"The board has consistently said that due to obvious conflict points and because of their historical ties to Frasers, Mike Ashley and Mike Lennon are not appropriate candidates to join the board in any circumstances, whatever commitments are offered," said Boohoo Group chair Tim Morris.
"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 choose which commitments it will give."
At 0853 GMT, shares in Boohoo Group were up 1.01% at 35.09p, while those in Frasers Group were down 0.64% at 620p.
Reporting by Josh White for Sharecast.com.
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