Monsoon chief defies investors' outrage

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The Independent Online

Peter Simon, the founder of Monsoon, who has been behind a controversial move to list the company on the Alternative Investment Market, told shareholders yesterday that the will of his family would prevail and that they should invest elsewhere if they do not like the way the company is run.

"I think we are a great company but the City has never given any credit for for what we have achieved," said Mr Simon.

In a meeting yesterday with shareholders, described by an attendee as "a tense affair", Mr Simon said: "A company is a capitalist democracy where the view of the majority prevails. I make no apology for the fact my family own 75.5 per cent of Monsoon. That means minority shareholders need to share our views. This company was a family business when we floated and it still is."

His words met a stony reception with the few shareholders who had turned out to the former Quaker Hall in Maida Vale, London, to protest at the recent attempt by the Simon family to increase its control of Monsoon and list the company on Aim.

Shareholders told Mr Simon they felt they had been "shafted" by the put options that the family had offered as a means of building their stake. These gave shareholders the right to sell shares at 140p, which was only a 7 per cent premium to the then share price. Investors felt Mr Simon's family was trying to buy up the company on the cheap.

"This meeting was an opportunity for shareholders and management to have a more reasonable discussion about the future of the company but the meeting was too confrontational," one said after the meeting.

"Key questions such as why the board is thinking of cutting the dividends when they have cash coming out of their ears and is the board going to be independent were not answered. The company is run by the board, not by the larger shareholder," he added.

Another shareholder said the meeting, from which the media was barred, had been very aggressive: "Many of the questions weren't clearly addressed and it was made obvious that we as shareholders were just an annoyance to the management. I can't understand why they didn't just take the company private and get rid of us for a fair price."

Shareholders had their worst fears over the future of the company's dividends confirmed when the company revealed that the Simon family Trusts are pushing for the dividends to be cut back or scrapped. But Mr Simon said the board had not yet taken a decision on the dividends.

In a defensive meeting with reporters after the shareholder meeting, Mr Simon said the family should have sold at least 40 per cent of the business when it floated in 1998 at 198p. The family has kept a 72 per cent stake, although the recent put option offer has increased their stake to 75.5. This has made the stock very illiquid and it is now not followed closely by the City.

Mr Simon, who spoke to journalists from his offices, complained that the investment community had never given the company any credit for its success. He said Monsoon was one of the only retailers to have been profitable every year for 30 years bar one. He said he was disappointed the family Trusts had not succeeded in getting a 92 per cent stake but he insisted the company would remain public. He did, however, confess that it would have been a good idea to buy up the whole company when the shares were as low as 44p in 2000.