Online retail giant THG confirmed this morning that its founder, Matthew Moulding, has agreed to give up his “golden share” after the company’s shares plunged amid fierce scrutiny over its corporate governance.
The “golden share” structure has been criticised by institutional investors who believe it can give founders too much control.
THG’s structure has also previously stopped the firm entering the FTSE 100 under UK listing rules.
The company, which was previously called The Hut Group, currently has a dual-class share structure which allows the founder and chief executive to have significantly greater voting powers than other investors.
However, THG said today that it will now cancel the special share rights and start its application process to move onto the premium segment of the London Stock Exchange’s main market.
The company’s board said it also plans to launch a “further review” into its corporate governance.
Its renewed efforts to improve company governance come after the firm’s share value slid by almost 50 per cent over the past month.
The Manchester-based business, which has e-commerce brands such as MyProtein and Lookfantastic, had seen investor sentiment ebb away after a critical report by researcher The Analyst.
The report expressed concerns over its tech platform Ingenuity and encouraged investors to short – bet its shares will fall.
THG held a Capital Markets Day last week, providing the firm with an opportunity to ease concerns, but the move drastically backfired, with shares tumbling 35% on the day of the presentation amid fears that backing from Japanese investment giant Softbank is cooling.
Moulding said: “After the anniversary of our 2020 listing we feel that the time is right to make this next step and apply to the premium segment in 2022, thereby continuing the development of THG as we endeavour to deliver our strategy for the benefit of our shareholders, key stakeholders and employees.”
Shares in THG rose by 3.4 per cent in early trading on Monday.