Independent proxy adviser Glass Lewis is the latest to urge Boohoo investors to reject Mike Ashley’s bid for a seat on the fashion firm’s board when the company holds an emergency meeting later this month.
Boohoo said Glass Lewis has recommended shareholders vote against the plans on 20 December. It follows that of prominent shareholder advisory firm ISS, which also previously urged shareholders to reject the resolutions.
In a statement today, Glass Lewis confirmed that “appointing a director with significant historical ties to Frasers, without a comprehensive agreement in place to mitigate potential conflicts of interest, could raise further concerns among investors”.
It added that the refusal by Frasers to provide the necessary governance commitments “raises questions about its commitment to addressing the governance and conflict-of-interest concerns highlighted by the company and may suggest that its intentions are not fully aligned with the interests of its broader shareholder base”.
Tim Morris, Chairman at Boohoo Group, said: “Glass Lewis’s analysis underscores our concerns regarding the significant risks posed by appointing individuals with strong historical ties to Frasers without adequate governance commitments in place.
“It is the case that the dominant global proxy advisers, ISS and Glass Lewis, have clearly supported the board’s view that Mike Ashley and Mike Lennon should not be elected to the board “
It comes shortly after Boohoo published an open letter to shareholders, reiterating its recommendation for shareholders to vote against Mike Ashley’s bid for a seat on the retailer’s board.
The letter claimed that the demands from Frasers form part of a campaign that appears to be designed to “destabilise Boohoo and disrupt its plans to unlock and maximise shareholder value”.
It also noted that Boohoo is “not deliberately seeking confrontation with Frasers” and “would at all times act in the best interests of the company and all shareholders”.
On Sunday, in an open letter to shareholders, 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.
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 Ashley was pursuing his own commercial interests rather than that of its shareholders.
Shareholders will have the opportunity to vote on Ashley’s attempt to gain a seat on the company’s board before Christmas.
