The founder of Revolution Beauty Adam Minto is in advanced talks to repay nearly £3million to settle allegations that he breached his fiduciary duties to the company, according to reports.
Revolution Beauty hopes the settlement will draw a line under a tumultuous two years since its initial public offering, which has included shareholder showdowns and a stock exchange suspension.
Governance and operational crises have left the company valued at just a fraction of its near-£500million listing price.
Sky News reports that Minto could hand over the money as soon as this week while co-founder Tom Allsworth is also in discussions with Revolution Beauty to amend the timetable for deferred payments owed to him for his stake in the group’s Medichem business.
However the firm did stress that there was ‘no guarantee that agreements will be reached’
In response to the report, Revolution Beauty said on Monday it ‘remains in negotiation’ with Minto and Allsworth.
However the firm did stress that there was ‘no guarantee that agreements will be reached’.
In a statement, the group said: ‘As previously announced on 20 June 2023, the group announced potential legal proceedings against Mr Minto regarding the events that led to a delay in the audit of the FY22 results and the suspension of the company’s shares from trading on AIM.
‘Separately, and as previously announced on 31 August 2023, the board is negotiating with Tom Allsworth, the previous owner of Medichem, to reach a revised agreement on the terms of its acquisition.’
In January, chief executive Bob Holt said a probe has identified ‘a number of serious issues’ with the running of the business under previous management.
This included loans from Minto and Allsworth, founder of Medichem – which was acquired by Revolution Beauty in 2021 – to an employee and some distributors.
None of these loans, worth around £1million in total, had been disclosed to the board.
Earlier this month, the London-listed group’s revenue increased by 20 per cent to £90.4million in the six months to the end of August, with UK sales growth of 14 per cent driven by revenues from Boots and Superdrug stores.
The business ended the period with a pre-tax profit of £400,000, against a loss of £13.7million in its first half.
Revolution Beauty Group shares fell by 1.16 per cent to 29.90p in Monday midday trading.
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