THG founder Moulding gives up golden share in governance overhaul
THG founder Matthew Moulding has confirmed plans to give up his “golden share” after the online retail giant’s shares plunged amid scrutiny over its corporate governance.
The Manchester-based company, which was previously called The Hut Group and which owns online beauty retailers Cult Beauty and Lookfantastic among others, currently has a dual-class share structure which allows the founder and chief executive to have significantly greater voting powers than other investors.
The “golden share” structure has been criticised by institutional investors who believe it can give founders too much control. THG’s structure has also previously stopped the firm entering the FTSE 100 under UK listing rules.
However, THG said on Monday that it will now cancel the special share rights and start its application process to move onto the premium segment of the London Stock Exchange’s main market.
The company’s board said it also plans to launch a “further review” into its corporate governance.
Its renewed efforts to improve company governance come after the firm’s share value slid by almost 50% over the past month. The business had seen investor sentiment ebb away after a critical report by researcher The Analyst.
The report expressed concerns over its tech platform Ingenuity and encouraged investors to short – bet its shares will fall.
THG held a Capital Markets Day last week, providing the firm with an opportunity to ease concerns, but the move drastically backfired, with shares tumbling 35% on the day of the presentation amid fears that backing from Japanese investment giant Softbank is cooling.
Moulding said: “After the anniversary of our 2020 listing we feel that the time is right to make this next step and apply to the premium segment in 2022, thereby continuing the development of THG as we endeavour to deliver our strategy for the benefit of our shareholders, key stakeholders and employees.”
Shares in THG rose by 3.4% in early trading on Monday.
Image: THG's Matthew Moulding with PM Boris Johnson. Copyright: PA