Legal Action Initiated Against Founder of Revolution due to Accounting Scandal

Revolution Beauty is currently considering legal action against a former executive as it grapples with an accounting scandal.

Trading in the cosmetic company’s shares has been halted since September when auditors refused to sign off on its financial statements for the previous year.

Adam Minto, co-founder and CEO, resigned from the company in November following the launch of an investigation into the firm’s financials.

The recently released audited accounts revealed that the company had overstated its earnings by £23 million.

Revolution Beauty has sent a letter to Minto alleging that he breached his responsibilities to the company, and is seeking to recover costs resulting from the alleged misconduct.

Facing the music: Revolution founder Adam Minto (pictured with singer Alexandra Burke) quit the company in November after the launch of a probe into the firm’s finances

Revolution Beauty, which went public on the AIM market in 2021 with a valuation of nearly £500 million, intends to recover significant amounts related to the exceptional costs incurred as a result of the alleged misconduct.

The company has given Minto a deadline of July 7 to respond to the allegations.

In addition, major shareholder Boohoo has called for the removal of CEO Bob Holt, chairman Derek Zissman, and CFO Elizabeth Lake from Revolution Beauty.

According to a spokesperson for Boohoo, while they appreciate the efforts of the current leadership team in stabilizing the business, they believe that a new team with the right retail, e-commerce, and consumer brands experience is necessary for the company’s growth.

Boohoo has announced that it will vote against the reappointment of these directors at Revolution Beauty’s upcoming annual meeting.