Revolution Beauty reveals potential legal action against founder and ex-boss - Indoors Beauty

Revolution Beauty reveals potential legal action against founder and ex-boss

Revolution Beauty reveals potential legal action against founder and ex-boss

Under-fire cosmetics agency Revolution Beauty has revealed doable legal action against its founder and former chief government Adam Minto.

The group – which additionally confronted a name on Monday from its greatest shareholder, Boohoo, to interchange the present prime bosses – stated it despatched a letter of declare to Minto final month alleging that he breached his duties to the agency.

It stated among the issues alleged contributed to the delay within the group’s 2021-22 outcomes, which has led to the suspension of shares since final September.

The agency stated it was trying to get well “materials sums” after being hit by hefty prices because of the issues alleged.

It has not but acquired a “substantive” response from Minto or his legal representatives and has set a deadline of seven July for him to take action.

Revolution Beauty stated: “The firm takes these issues extraordinarily severely.

“It is necessary for shareholders to notice that there might be no certainty on the end result of those legal proceedings, and the corporate will make additional updates to shareholders as acceptable sooner or later.”

It comes amid a turbulent time for the agency, which on Monday noticed Boohoo reveal plans to vote against the reappointment of Revolution Beauty’s CEO Bob Holt, Chairman Derek Zissman and CFO Elizabeth Lake on the agency’s upcoming annual common assembly on 27 June 2023.

Boohoo, which owns a stake of round 26.6% within the firm, has requested a separate common assembly to oust the three bosses and exchange them with Boohoo Non-Executive Director and former New Look Chairman Alistair McGeorge as Interim Executive Chairman and ex-Boohoo finance boss Neil Catto as CFO.

Revolution Beauty stated on Monday it was “reviewing the content material and validity” of Boohoo’s assembly request with its advisers and would make an extra announcement in “due course”.

It was thrown into disaster final autumn when shares have been suspended after auditors refused to log out its accounts for the final monetary 12 months, which sparked an investigation into its funds.

In January, an impartial investigation by Macfarlanes and Forensic Risk Alliance discovered Revolution Beauty had inflated gross sales by £9 million to fulfill annual targets and unearthed issues with the group’s accounts, together with claims that private loans have been made by Minto and Chairman Tom Allsworth to an worker and to distributors.

The pair have been discovered to have made loans and different investments of round £1 million to one of many distributors, and Minto offered a £300,000 private mortgage to the house owners of a separate distributor, which weren’t disclosed to the board on the time.

The probe additionally alleged that inadequate checks had been made on acquisitions.

The investigation was launched after Revolution Beauty’s auditors flagged severe issues over the group’s accounts.

Minto and Allsworth stop following the investigations.

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