Ex-boss of Revolution Beauty agrees to pay firm £2.9 million to end auditing dispute
Revolution Beauty has reached a settlement agreement with co-founder and former CEO Adam Minto to draw a line under issues with its accounts, which threw the business into crisis in 2022.
The British beauty retailer said that Minto agreed to a "full and final settlement of certain claims between them" and will pay Revolution Beauty a sum of £2.9 million.
Minto will pay the amount in six annual instalments, with £483,333.35 due on 28 March each calendar year. If a payment is late, then interest will be charged at 8% per annum.
"Having considered its options and legal advice received, the Board of Directors believe this is a fair settlement for the company," reads a statement from Revolution Beauty.
The cosmetics firm ran into trouble when its auditors refused to sign off on its financial accounts for the year to February 2022, leading shares in the firm to be suspended on the London Stock Exchange while an investigation was carried out.
Minto quit the business in November 2022 amid the saga.
It later emerged that there were a series of problems with its accounts, including the sale of nearly £10 million worth of stock just before the end of the financial year, which a probe found should not have counted towards its reported revenue.
The investigation also uncovered claims that Minto, and former chairman and fellow founder Tom Allsworth, had made personal loans to an employee and to distributors which were not disclosed to the board at the time.
Revolution had said it was considering taking legal action against Minto, alleging he breached his duties to the firm.
However, the settlement is set to draw a line under the dispute, with the company stressing there was "no admission or acceptance of liability by either party" as part of the agreement.
Alistair McGeorge, Non-Executive Chairman at Revolution Beauty, said: "We are very pleased to have reached an agreement with Adam.
"This, together with the revised payment schedule agreed in December 2023 for the acquisition of Medichem, means we can now focus on the future.
"We look forward to providing an update on our strategy at our upcoming Capital Markets Event on 8 February 2024”.