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 that it was willing to have “constructive” talks about Frasers joining its board.
But it said current nominees Mr Ashley and Mike Lennon, a restructuring expert, would have “irreconcilable conflicts of interest”.
The fast fashion retailer has been subject to a campaign by Frasers’ boss Mr Ashley to get himself installed as chief executive at Boohoo in recent months.
That was cut short when Boohoo appointed Dan Finley, former boss at Debenhams, which it owns, in November.
Mr 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 Mr Ashley and Mr Lennon joining the board is 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 the company up 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 December 20.
In a Friday morning statement, Boohoo said the letter indicated that 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.
Boohoo chair Tim Morris said Mr Ashley and Mr Lennon are “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.
“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 Mr Ashley’s bid for a seat at the meeting on December 20.
Earlier this month, Mr Ashley also attacked Mr 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”.
Mr Ashley warned against a turnaround that sees the “fire sale of assets at knockdown prices”, including the Debenhams brand which he said should not be sold.
