The founder of Revolution Beauty is facing legal action over an accounting scandal after the accountant refused to sign off on his books
Revolution Beauty considers legal action against a former boss reeling from an accounting scandal.
Trading in the makeup company’s shares has been suspended since September after accountants refused to sign off the books from the previous fiscal year.
Co-founder and CEO Adam Minto left the company with immediate effect in November after the start of an investigation into the company’s finances.
When the audited accounts were published last month, it showed the company was making £23 million less than previously reported.
The cosmetics retailer has revealed that it sent a letter to Minto last month claiming it “breached its fiduciary, legal, contractual and/or tort duties to the company.”
Facing the music: Revolution founder Adam Minto (pictured with singer Alexandra Burke) left the company in November after launching an investigation into the company’s finances
Revolution, which was listed in the junior Aim market in 2021 with a market value of nearly £500 million, has said it was seeking “material amounts related to the exceptional costs incurred by the company as a result of the alleged business” .
The company has set a July 7 deadline for Minto to respond. It says he hasn’t yet.
In another blow, major shareholder Boohoo has also called for CEO Bob Holt, chairman Derek Zissman and chief financial officer Elizabeth Lake to be fired from the company.
A spokesperson for Boohoo said: ‘As Revolution Beauty’s largest shareholder, Boohoo is grateful to Bob, Derek and Elizabeth for stabilizing the company.
“However, as Revolution Beauty moves into the next phase of shifting focus to growth, Boohoo believes a senior leadership team with the right experience in retail, e-commerce and consumer brands is required to deliver shareholder value.”
Boohoo said it would vote against reappointing these directors at Revolution’s annual meeting next week.