Monsoon investors query boardroom independence

Minority shareholders in Monsoon, the fashion retailer, yesterday expressed concerns about corporate governance at the company as the family trusts of the founder moved to increase their stake in the company to 92.5 per cent.

Monsoon has only four directors, and just one non-executive. In March the company announced that Graham Searle was stepping down as a non-executive director. It also announced that Graham Frost would step down as non-executive chairman in April, though he remains on the board. The company's managing director Rose Foster has quit to join Littlewoods.

The departures mean there is no majority of independent directors to look after shareholders' interests in the event of family trusts of the group's executive chairman Peter Simon increasing their holding.

One senior fund manager said: "We are concerned about someone taking an independent view on behalf of minority shareholders."

Monsoon is chaired by its founder Peter Simon, whose family has put in place a controversial scheme to increase its stake from 72.5 per cent to 92.5 per cent. Some shareholders are worried that the move is tantamount to "creeping control" which virtually takes the company private.

Richard Ratner, a retail analyst at Seymour Pierce, said he was worried by the lack of guidance from the company's non-executive. In a research note he said: "Our view is that an effective takeout price of 130p... is totally inadequate. Do not accept the offer."

In March Monsoon said it had begun a search for replacement non-executives and would make an announcement in due course. No further a updates have yet been made.

Monsoon shares edged up 2.5p to 129.5p yesterday as shareholders moved to take advantage of a complicated scheme offered by the Stoneycroft trust. It is offering to buy shares at 130p up to 29 July.

Comments