Writs fly in Oasis legal wrangle

Click to follow
The Independent Online
The directors of the Oasis fashion chain are facing a legal wrangle after the founders of the original group issued writs against the company and its main board directors.

The writs were served against five members of the board, including brothers Michael and Maurice Bennett who run the business. Venture capital group Apax Partners is also cited.

The claims include allegations of fraud, breach of fiduciary duty and conspiracy ahead of the collapse of the original Oasis business in 1991. The papers were served on the directors as they prepared for the company's annual meeting in London yesterday morning.

The allegations are the latest in a long-running battle between the present board and Graham and Edwina Brown, a husband and wife team who formed the original business in 1973 after leaving university.

The pair threatened legal action last year when Oasis was preparing for a stock market flotation, forcing the company to include an "erratum" in its prospectus.

Speaking after a brief meeting in front of a handful of shareholders, chairman Maurice Bennett said the company and its directors would "vigorously defend" the allegations.

He added that the claims were the same as those which surfaced last year. "I don't think there is anything new in these claims. We believe there is no case to answer." The allegations relate to the collapse of the Oasis business in 1991 three years after the Bennetts had taken a majority stake in the company. The Browns claim that the Bennetts colluded to push Pinecord, the holding company, into liquidation. Michael and Maurice Bennett later bought the company back from the liquidators for pounds 1.6m

Oasis has since proved a spectacular success with sales growth eclipsing most of its high street rivals.

The company was floated on the stock market last year at 148p; the share price is now 420p, valuing Oasis at pounds 220m.

Michael and Maurice Bennett sold shares worth pounds 11m as part of the listing. Their remaining stake is worth more than pounds 30m.

The seeds of the conflict date back to 1988 when the Bennett brothers and venture capital group Apax partners invested in Pinecord. While the Bennetts brothers were keen to expand the chain, the Browns claim they preferred a more cautious strategy with lower head office costs.

The Bennetts say the company failed due to high shop rents signed during the property boom of the 1980s.

They also say that as majority shareholders who had invested pounds 2m in the group, they lost more through its collapse than anyone.The Bennetts later bought Oasis back from the liquidators beating off other bidders with an offer of pounds 1.6m.

Comments