It's time for an independent Boohoo chairman, says top City broker
Boohoo should get an independent chairman after a “rollercoaster share price ride” following an auditor reshuffle and controversy around its supply chain in Leicester, broker Peel Hunt said.
Retail analysts Jonathan Pritchard and John Stevenson said that the argument for an independent chairperson is resonating increasingly louder as investors grow tired of swings in the share price.
The stock regained its losses on Wednesday after investors were spooked this week by the resignation of its auditor PwC, and Boohoo’s difficulty in appointing a successor. Shares were trading up 5.5pc at 264p.
“For us, this [independent chairperson] would be a major part of the group’s rehabilitation in the eyes of investors and other stakeholders,” they added.
The stock tumbled by almost a third over two days when the Leicester allegations came to light in July. Co-founders Mahmud Kamani and Carol Kane bought £15m of shares to demonstrate their faith in the business.
Mr Kamani became executive chairman after Peter Williams stepped down in March last year after rising tensions between him and Mr Williams.
Kamani has said that Williams “wanted him out”. Williams’ view is that Boohoo is run as though it is still a family business rather than a public company.
This month the Leicester West MP Liz Kendall wrote to shareholders calling for Kamani and John Lyttle, the chief executive, to be removed after a report by Alison Levitt QC highlighted failings such as life-threatening fire safety breaches and evidence that staff in the supply chain were earning less than the minimum wage.
Boohoo directors raised concerns at five board meetings about the amount of influence exercised by the Kamani family between 2014 and 2020, the report also found.
The firm is now preparing to appoint two new non-executives after some industry observers pointed out the lack of influence of impartial directors on the board.
