Revolution Beauty confirms talks to avoid lawsuit against former boss

Revolution Beauty has confirmed it is negotiating with former boss Adam Minto after reports he might pay the company £3 million to avoid a potential lawsuit.

The beauty business said it is also talking to former executive chairman Tom Allsworth about changing the terms for the acquisition of Medichem, which he owned.

“Revolution Beauty remains in negotiation on both these issues,” the company told shareholders on Monday. "There is no guarantee that agreements will be reached.”

Revolution Beauty said in June that it was planning potential legal proceedings against Minto.

In September last year Revolution Beauty’s shares were suspended after the company’s auditors refused to sign off on its books.

Months later the business revealed a series of problems with its accounts; for example, it had sold nearly £10 million worth of stock just before the end of the financial year, which should not have counted towards its revenue.

Revolution Beauty was finally able to publish its results for the year ending February 2022 in May 2023.

Sky News reported on Friday that Revolution Beauty and Minto are discussing a £3 million payment for allegedly breaching fiduciary responsibilities.

The broadcaster said it had seen a letter from the company to its former boss.

“The claim alleges that Minto breached his fiduciary, statutory, contractual and/or tortious duties to the company,” the letter said.

“Certain of the matters alleged contributed to the delay in the audit of the group’s FY22 results, and to the suspension of the company’s shares from trading on AIM.

“The company is looking to recover material sums relating to the exceptional costs the company incurred as a result of the matters alleged.”

Revolution Beauty said on Monday: “As previously announced on 20 June 2023, the group announced potential legal proceedings against Minto regarding the events that led to a delay in the audit of the 2022 financial year results and the suspension of the company’s shares from trading on AIM.”