Another day, another open letter from Frasers Group addressed to the board of Boohoo Group following its appointment of a new CEO in a rebuff to Frasers’ majority owner Mike Ashley.

This time the letter comes from Frasers company secretary Robert Palmer and it’s saying that Boohoo shouldn’t make any asset disposals “without prior shareholder approval”.

It also wants the board to obtain and publish the confirmation of an independent global adviser/investment bank that the terms of any such disposal “are fair and reasonable, the disposal has been conducted at arm’s length and the disposal is in the best interests of Boohoo’s shareholders”.

For those who’ve missed the story so far, Boohoo Group’s share price has plummeted as its performance has weakened significantly and while Frasers used the lower price to pick up shares adding up to a significant stake (around 27%), it’s understandably wanting to see signs of improvement.

With Boohoo having recently announced that its CEO is to step down and that it has reached a new financing deal on terms that Frasers sees as disadvantageous, the Ashley-controlled retail group has been agitating for change.

In recent weeks it had called for Ashley himself to be appointed CEO, instead of which Boohoo moved quickly to promote internal candidate Dan Finley (CEO of Debenhams) to the group chief executive role. 

Boohoo is also conducting a review that could see some of its brands being divested, which Frasers is clearly unhappy about. The whole situation is also complicated by past rivalry over Debenhams. Ashley had built up a roughly 30% stake in that business when it was a stock exchange-listed entity but was rebuffed by those in control in his attempts to take it over. Boohoo then acquired it out of administration for a price much lower than Ashley had paid for that now-worthless 30% stake. 

So what else did Frasers have to say on Wednesday? It asked the board “to stop, once and for all, its utter disregard for shareholder views…. We continue to believe strongly in the potential of the Boohoo business and the quality of its brands. However, the directors have pushed Boohoo into a terrible refinancing, while refusing to engage properly with Frasers on it. They have then rushed out a CEO appointment to try to block the say of shareholders. This has to stop. What will they try next? Desperate people do desperate things.”

It added that “given the market headwinds and commercial difficulties that Boohoo is currently facing, any asset disposals by the company, including of any of its five core brands or the Soho office, would be executed from a position of weakness and unquestionably be at a discounted valuation, and would therefore be wholly unacceptable without prior shareholder approval”.

As well as its complaint about Boohoo’s board not engaging with its biggest individual shareholder, it reminded the board of the duties of each director, “in particular their duty to act honestly and in good faith in the way most likely to promote the success of the company for the benefit of its members as a whole”.

And it said any disposal that may occur at an undervalue and/or potentially to related parties of [Boohoo co-founder and executive chairman Mahmud] Kamani, could expose the directors to personal liability to Boohoo, and Frasers and other shareholders would be forced to consider our legal rights of redress”.

Finally, it added that it has “established a dedicated website so that all Boohoo shareholders can easily access all relevant information and materials with regards to Frasers’ solution to Boohoo’s leadership crisis: www.boohoodeservesbetter.com. This will be available shortly”.