Boohoo accuses Frasers of using stake to promote its own interest

Boohoo has accused Mike Ashley’s Frasers Group of using its stake in the struggling online fashion group and in other retailers to promote its own “commercial self-interest”, at the expense of fellow investors.
Ashley, the billionaire founder of Frasers, who is also a Boohoo shareholder with a 27 per cent stake, has been lobbying Boohoo to install himself on to the board after it launched a strategic review of its operations. These include a number of fashion labels such as PrettyLittleThing, Karen Millen, Oasis and Warehouse.
On Wednesday, Ashley had demanded a “restriction on disposals without shareholder approval” to “protect the interests of Boohoo, its shareholders and its stakeholders”.
Frasers was concerned that Mahmud Kamani, Boohoo’s co-founder and chairman, would buy back Boohoo and some of its brands at a cheaper price. Kamani, along with his son, Umar, has about 15.5 per cent of the shares.
Kamani confirmed on Thursday, however, that he had “no intention” to make an offer for the fashion group, triggering restrictions for six months under the City takeover code.
Boohoo said this sent a “clear message that [his] interests are entirely aligned with maximising value on behalf of all shareholders”.
The company called on Frasers to “do the same or to explain why they are unable or unwilling to give these commitments”.
It said it would only offer a boardroom seat to an “appropriate” non-executive director and that “appropriate governance controls would be required to protect the company’s commercial decision”.
Frasers has been criticising the board of Boohoo for the decline in the company’s share price, and in a letter published on Wednesday, chastised the board over “its utter disregard for shareholder views”.
Boohoo hit back and said that Frasers’ “continual legal letters and public posturing are not conducive to maximising value for all shareholders, and encourages them to enter into constructive discussions with the board”.
It also reiterated governance concerns about Ashley joining as Frasers was “not an independent shareholder in the group, focused solely on the value of its investment. It is a trade competitor that is seemingly focused on its own commercial self-interest.”
The Boohoo board said it considered it “wholly inappropriate for Frasers to seek to leverage its significant shareholding in Boohoo and other UK retailers to promote its own commercial self-interest, such as Frasers Plus, at the expense of the other shareholders and will take all steps necessary to protect its commercial position and shareholders best interests.”
Frasers has been pushing Frasers Plus, its buy-now, pay-later product, on to to some of Britain’s largest online retailers, including Asos, Boohoo, Currys and AO World.
Frasers Group was contacted for comment.