Revolution Beauty will potentially take legal action against the company’s founder and former chief, Adam Minto, over claims he breached fiduciary and statutory duties while at the helm.
In a letter to investors, the makeup brand said it believes Minto’s alleged wrongdoings led to delay in audit of the full year results in 2022 group’s which led to suspension of the company’s shares from trading on AIM.
Minto, who founded the brand nearly a decade ago, resigned last year after its auditor, BDO, raised concerns about the delay of the financial report.
The cosmetics group said that Minto has until 7 July to respond to claims made against him in the letter.
A statement read: “The company takes these matters extremely seriously. It is important for shareholders to note that there can be no certainty on the outcome of these legal proceedings, and the Company will make further updates to shareholders as appropriate in due course.”
It comes amid a rocky period for the brand who is also facing a shareholder revolt from Boohoo, who owns a 26.6 per cent stake in the company.
The fast fashion retailer will vote against the reappointment of chief executive Bob Holt, chairman Derek Zissman and chief financial officer Elizabeth Lake – and also wants a separate meeting to remove three bosses.
Boohoo wants to replace the members with pros from its retailer team to inject extra e-commerce knowledge into the brand.
Revolution Beauty said it will publish a “further announcement in the coming days in light of the announcement made by Boohoo.
City A.M has contacted Adam Minto for a comment.