Shareholder advisory group ISS backs Boohoo in Mike Ashley board spat

(Sharecast News) - Boohoo said on Monday that international shareholder advisory group ISS has recommended that its shareholders vote against resolutions seeking board representation from Mike Ashley' Frasers Group. In a letter to Boohoo shareholders published on Sunday, Mike Ashley accused the company's bosses of "panic-driven mismanagement" as he warned the fashion retailer against a "fire sale" of assets.

In the letter, Ashley said shareholders had "every right to feel angry and frustrated" at the board's "gross mismanagement".

"I see brands that are underperforming and no clear strategy to halt the decline," he wrote. "I see panic-driven mismanagement resulting in reckless decisions that are obliterating shareholder value and jeopardising the company's future.

"The recent game of musical chairs - appointing Dan Finley as CEO, Mahmud Kamani as executive vice-chairman and Tim Morris as chairman - is the epitome of chaos, a desperate attempt to mask dysfunction at the top."

He added: "Debenhams should not be sold and if any other non-core asset sales are deemed necessary, I will insist on a rigorous process to maximise value, with independent advisors and shareholder consultation before any decisions are made."

Boohoo is due to hold a general meeting on 20 December at which shareholders will be asked to vote on whether they agree to admit Ashley and restructuring expert Mike Lennon to the board.

But Boohoo said on Monday that ISS has recommended that its shareholders vote against these resolutions.

"ISS states that Frasers has offered a superficial view of performance and no specific plans for change and the two Frasers candidates, Mike Ashley and Mike Lennon, have real conflicts of interest, concluding that board change at Boohoo Group is not warranted," it said.

Chairman Tim Morris said: "The board of boohoo welcomes the backing of ISS, which is in line with the recommendation we have made to reject the proposals from Frasers Group.

"We are clearly focused on doing what is right for all investors, following the launch of our Business Review to unlock and maximise shareholder value, the appointment of Dan Finley as our CEO and a successful fundraising."