It turns out the wife of Boohoo's broker owns a £22m stake

IPO WATCH: Will it be tears for the online fashion retailer as it prepares to float next week?

by Rachel Savage
Last Updated: 14 Oct 2014

All is fair in love and commerce – if, of course, companies avoid those pesky conflicts of interest. will be trying to look as prim and proper as possible, then, after it was revealed that the wife of the broker advising on its IPO has a stake in the company.
Clare Hughes is the wife of Zeus Capital director and co-founder Richard Hughes, and has a 3.93% stake in the £560m online fashion retailer, according to the FT. Mr Hughes was actually a director of Boohoo’s parent company Wasabi Frog (mmm - horseradish amphibians...) before he resigned three weeks ago.
Boohoo told the FT that Ms Hughes would keep her stake for at least 18 months after the IPO, which it claimed would avoid conflicts of interest. The online clothing company is floating on London’s AIM market on March 14, with 55% of shares being sold at 50p each, leaving the founding Kamani family with a 44% holding.
AIM's rules stipulate people with a relationship to the director of a nominated adviser (Nomad), which regulates a company’s behaviour on the baby stock market, can own up to 10% of a business. However, if they have 3% or more, ‘adequate safeguards’ have to be put in place to prevent conflicts of interest.
There is a further incestuous twist to this fashionable tale: Boohoo director Petar Cvetkovic is a non-exec director of Crawford Healthcare Holdings, owned by Mr Hughes, and chief exec of DX Group, a logistics and parcels company that had Zeus Capital as its Nomad when it floated on AIM last month.
If Cvetkovic is classed as an ‘associate’ of Mr Hughes, then Zeus can’t be Boohoo’s Nomad. However, London Stock Exchange said it deals with each case individually, as there is no set definition of ‘associate’. How convenient.
The lesson in all of this? If you’re planning a float, make sure your relationship with your advisers is less cosy woolly jumper and more lightweight jacket.

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