Boohoo gains backing of proxy adviser in boardroom spat with Frasers
Boohoo said Institutional Shareholder Services (ISS) had recommended shareholders vote against the plans on December 20.
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Your support makes all the difference.A prominent shareholder advisory firm is urging Boohoo investors to reject Mike Ashley’s bid for a seat on the fashion retailer’s board when the company holds an emergency meeting later this month.
Boohoo said Institutional Shareholder Services (ISS) had recommended shareholders vote against the plans on December 20.
The fashion firm is embroiled in a war of words with businessman Mike Ashley’s Frasers Group, which has a 27% stake in Boohoo.
On Sunday, in an open letter to shareholders, Mr Ashley attacked the company for having an “egotistical founder who has an unhealthy grip on the board” and said it was “in desperate need of the guidance I can provide”.
He also 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.
Mr Ashley said his motivation for seeking to become Boohoo’s chief executive was to help the brand and “prevent any dishonest profiteering” off investors.
In response, Boohoo insisted that Mr Ashley was pursuing his own commercial interests rather than that of its shareholders.
On Monday, Boohoo said in a statement: “ISS states that Frasers has offered a superficial view of performance and no specific plans for change and the two Frasers candidates, Mike Ashley and Mike Lennon, have real conflicts of interest, concluding that board change at Boohoo Group is not warranted.”
Chairman Tim Morris said the board “welcomes the backing of ISS, which is in line with the recommendation we have made to reject the proposals from Frasers Group”.
Shareholders will have the opportunity to vote on Mr Ashley’s attempt to gain a seat on the company’s board before Christmas.