Troubled makeup brand Revolution Beauty is considering legal action against its former boss Adam Minto, “looking to recover material sums” from him, as it alleges Minto’s actions contributed to the firm’s disagreement with auditors and share suspension.
Revolution shares have been suspended since September of 2022 after it couldn’t get auditors to sign off on its accounts for the previous financial year.
The audited accounts were eventually published last month, showing the business made £23 million less than it had previously reported, but shares remain suspended.
The makeup retailer said it sent a letter of claim to Minto, who quit in November, on 19 May. That letter alleged he “breached his fiduciary, statutory, contractual and/or tortious duties to the company”.
“Certain of the matters alleged contributed to the delay in the audit of the Group’s FY22 results, and to the suspension of the company’s shares from trading on AIM,” it said.
“The Company is looking to recover material sums relating to the exceptional costs the company incurred as a result of the matters alleged.”
Revolution set Minto a deadline of 7 July to respond. It says he has not done so yet.
Yesterday, major Revolution shareholder Boohoo called for the removal of a number of the beauty brand’s directors including chief executive Bob Holt, chairman Derek Zissman and chief financial officer Elizabeth Lake. It said it would vote against the reappointment of these directors at the firm’s 27 June AGM.
Boohoo said the overhauled board should then “undertake a rigorous process” to appoint additional independent directors.
It said: “As Revolution Beauty’s biggest shareholder, Boohoo is grateful to Bob, Derek and Elizabeth for stabilising the business.
“However, as Revolution Beauty transitions to its next phase, where the focus must switch to growth, Boohoo believes a senior leadership team with the right retail, e-commerce and consumer brands experience is required to deliver shareholder value.”
