Lush complains to watchdog about ex-boss in shares row

THE founders of Lush have complained to the City watchdog about a former director, as a row over control of a large stake in the cosmetics retailer escalates.

Lush has lodged an official complaint about Silverwood Brands with the Financial Conduct Authority and the Aquis stock exchange.

Silverwood is controlled by Andrew Gerrie, a former Lush director who is trying to ram through the transfer of a £220m shareholding in the retailer to the listed vehicle.

Mr Gerrie, who joined Lush shortly after the company was founded, was handed shares in the retail business in the 1990s under strict conditions governing their forward sales.

Under the terms, the Lush board has the right of first refusal if Mr Gerrie wants to sell any of his holding. Shares must also be paid for in cash at a valuation that is independently verified.

Mr Gerrie and his wife, Alison Hawksley, want to transfer a 20pc stake in Lush to Silverwood Brands, an investment company that is listed on London’s Aquis stock exchange.

Lush is resisting the move and has claimed Mr Gerrie has misled the stock market about the viability of the transfers. He previously tried to sell his shareholding shortly after leaving

Lush in 2014, but faced legal challenges at the time.

The company alleged that Silverwood misled investors by announcing in December that it planned to acquire the Lush shares, without referring to Mr Gerrie’s previous attempted sale and the associated legal challenges.

Lush also claimed it was misleading of Silverwood to say last month that the cosmetics company had rejected the transfer request “without reason”. The Lush board is believed to have told regulators it wrote to Silverwood on Feb 14 explaining why it was rejecting the deal.

Last night representatives for Mr Gerrie and his investment company hit back, claiming Lush was attempting “to violate minority shareholders’ rights”.

They accused Lush of conducting a campaign that “goes against its self-proclaimed ethical standards of business”.

A spokesman for Silverwood said: “Silverwood Brands plc rejects Lush’s claims which are totally unfounded. All statements made by Silverwood in its RNS statements have been correct.”

Mr Gerrie, who previously ran Lush’s Japanese business, has appointed lawyers to advise Silverwood on the legality of the transfer. Lush was founded in 1995 by entrepreneurs who helped mastermind the success of The Body Shop.

It is now one of Britain’s biggest privately-owned retailers.