Monsoon's Simon rules out independent directors

Peter Simon, the chairman and founder of Monsoon, yesterday risked further investor ire when he ruled out appointing any independent directors to the retailer's board as he confirmed plans to axe the interim payout.

Mr Simon, who unleashed a corporate governance storm last year by attempting to increase his family's stake in Monsoon to more than 90 per cent, said the money saved from paying the dividend would give the company firepower to pursue its overseas expansion plans.

The fashion group revealed yesterday that it was in talks over "substantial" international acquisitions. Mr Simon said the move would "potentially eat up a lot of cash" but declined to comment beyond saying that the plans were in an "embryonic stage".

He said the company's new dividend policy would be unveiled at its preliminary results. "The company is very prudent in the way it manages its cash. Any potential acquisition would have to be with the company's money and not bank borrowings," he added.

Shares in the company rose 0.5p to 152p yesterday ­ well above Mr Simon's 136.5p tender offer last autumn ­ after it posted a sharp increase in interim profits and said like-for-like sales grew by 2 per cent over Christmas.

Rose Foster, who controversially ditched plans to join Littlewoods and opted to become Monsoon's chief executive, said Christmas sales came "very late" for the group ­ in line with the trend reported elsewhere on the high street.

Although a creditable performance ­ especially when contrasted with the double-digit plunge in womenswear sales at Marks & Spencer ­ this represented a slowdown from the group's 6 per cent rise in underlying sales during its first half. Pre-tax profits for the six months to 11 November rose 19 per cent to £21m on sales up 22 per cent at £131.1m.

Mr Simon said the company, which overcame shareholder antipathy to a move from the main market and listed on AIM in December, had "no plans" to strengthen its board. The group has just three directors, all of them executive.

"It [appointing non-executive directors] is not law. It's not something which we are required to do and we have no plans to do so," Mr Simon said. Although FTSE 100 companies are required to have a majority of independent non-executives on their boards, no such rules govern AIM-listed companies.

Monsoon's minority shareholders ­ who own 24 per cent of the company ­ are understood to be watching the situation closely. "Peter Simon does as he wishes," Richard Ratner, an analyst at Seymour Pierce, said.