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Retail tycoon Mike Ashley has accused Boohoo of “blatant hypocrisy” as he gears up for a crunch shareholder vote to win a board seat next week.
In a letter to Boohoo shareholders – the fifth in recent weeks – Mr Ashley’s Frasers Group again urged investors to support the billionaire’s efforts to win a seat on the board alongside Michael Lennon, a restructuring expert.
Frasers is Boohoo’s largest shareholder with a 28pc stake. Because of this, the retail giant wants two seats in the boardroom to revive the struggling fast-fashion retailer, which has lost significant value in recent times.
The boardroom coup battle pits Mr Ashley, one of the best-known investors in retail, against Mahmud Kamani, Boohoo’s chairman, who has rebuffed the billionaire’s efforts to join the board.
Losing the vote could prove embarrassing for Mr Ashley, who has repeatedly urged City fund managers to back his Boohoo plan.
The latest letter said that Mr Ashley and Mr Lennon were the “best and most credible path to profits” and that rejecting the proposal at the Dec 20 meeting would “only result in further value destruction for all shareholders”.
Boohoo has consistently rebuffed the proposal and urged shareholders to vote it down because of conflict of interest concerns. Frasers and Boohoo compete in some similar areas of retail.
Leading shareholder proxy groups ISS and Glass Lewis have also said investors should vote against the plan.
In the latest letter, released on Thursday, Frasers accused Boohoo of “blatant hypocrisy” for rejecting the company’s nominations to the board because another Boohoo director also chairs a competitor.
Frasers pledged to make a string of legally binding commitments demanded by Boohoo on governance issues. However, it stopped short of promising not to buy further shares in the group.
Going above its 28pc shareholding to over 30pc would force Frasers to mount a formal bid for Boohoo under takeover rules.
The letter said: “Shareholders have lost money and there is justified disappointment with and distrust of the current leadership, in particular Mr Kamani. With the appointments of Mr Ashley and Mr Lennon, Boohoo has the potential to become a valuable and profitable business.”
Earlier this week, Mr Ashley accused Boohoo’s founder of being “egotistical” in another letter, his fourth, and said current management had created “a catastrophic mess” that had driven the firm’s shares down by 90pc since 2019.
Boohoo said shareholders should vote no for the plan, saying it had a credible turnaround plan and that Mr Ashley could be trying to destabilise the company.