Statement on Lush
referring Silverwood Brands Plc
to the Regulators

21ST MARCH 2023

Statement on Lush referring Silverwood Brands Plc to the Regulators

On 12 December 2022, Silverwood Brands Plc (“Silverwood”) announced that it had conditionally acquired a 19.8% stake in Lush Cosmetics Ltd (“Lush”) and Cosmetic Warriors Ltd from Andrew Gerrie (formerly a director of Lush) and Alison Hawksley for £216.8m, with the consideration being satisfied by the issue and allotment of shares in Silverwood. Those shares amounted to circa 95% of the issued shares in Silverwood. 

In that announcement it said that “The Directors believe that, as an AQSE quoted company, Silverwood will provide an opportunity for Lush customers to invest indirectly into Lush and reap the benefits of their continued support throughout the years.” Lush has therefore been particularly concerned that its customers, its employees and the public generally are being misled by the board of Silverwood and its advisers, particularly with regard to the following matters:

  1. The 12 December 2022 announcement was misleading because it failed to identify that Lush and Andrew Gerrie have been involved in a dispute regarding the transfer of his shares for many years; that in 2019 he abandoned an attempt to transfer his shares into a business that he was the majority owner of; and that there was at least a possibility that the transfer would not be approved by Lush.
  2. A further announcement on 16 December 2022 by Andrew Monk[1] on behalf of VSA Capital, who advised Andrew Gerrie and Alison Hawksley prior to the transfer and is now listed as Silverwood’s corporate adviser, identified that VSA had received equity in Silverwood as its fee for advising Silverwood, but misleadingly failed to refer to the matters in 1. above.
  3. Lush rejected the transfer of its shares on 14 February and communicated detailed reasons for that refusal to Andrew Gerrie on the same day.  Andrew Gerrie is an Executive Director and the majority shareholder of Silverwood and is someone that Silverwood stated in their 12 December announcement that they rely on to assist with their regulatory disclosures. On 20 February 2022, despite Andrew Gerrie being in receipt of Lush’s detailed reasons for 6 days, Silverwood made a misleading announcement that Lush had rejected the transfer but that Silverwood had not received reasons.
  4. The 20 February 2022 announcement went on to say that “Andrew Gerrie and Alison Hawksley (the “Lush Vendors”) have granted to the Company full contractual power to direct, and to give binding instructions to them in respect of, and to control, the exercise and/or non-exercise of any and all rights, powers and privileges attached to the Lush Sale Shares including without limitation, receipt of dividends and distributions, voting, participation and attendance at shareholders meetings of Lush. Therefore, the Company believes its interests are maintained.” That is misleading because the Articles of Lush prohibit a shareholder granting such contractual powers. 
  5. On 14 March 2023, a month after Andrew Gerrie received detailed reasons for Lush rejecting the transfer, Silverwood finally announced that it had received those reasons but withheld what they were.  The announcement repeated the misleading statement that Silverwood had contractual power over the shares.
  6. Silverwood’s announcement on 12 December 2022 asserted that Silverwood had issued 228m shares worth £216.8m in return for Andrew Gerrie and Alison Hawksley’s shares in Lush and Cosmetic Warriors Ltd.  Pursuant to s597 of the Companies Act 2006, Silverwood was on 19 December 2022 obliged to file with Companies House a valuation report that confirms the value of the assets that it has received (the Lush/CW shares) in return for the shares it has issued in itself.  Failure to do so is a criminal offence committed by each of the directors. No report has been filed with Companies House.

As a result, Lush has made a complaint to the appropriate Regulators.

[1] In 2009 Andrew Monk’s investment firm Blue Oar Securities was censured by the London Stock Exchange for issuing misleading statements and fined £250,000. Later, in 2013 when VSA Capital delisted from the AIM market, one of the minority shareholders was reported in the Telegraph to have said that Andrew Monk was behaving “unethically”.

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