Investors preparing to sue Conviviality

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Conviviality

Investors are reportedly preparing for legal action against embattled off-licence retailer Conviviality over concerns they were misinformed about its financial figures.

According to The Times, the rapid decline of the Bargain Booze and Wine Rack parent company has aroused suspicion of its board members.

In May it reported that group sales had almost doubled to £1.56 billion, while chief executive Diane Hunter announced in January that she had “confidence for both achieving current year board expectations, as well as the group’s longer-term performance”.

However, last week Conviviality announced intentions to appoint administrators, potentially placing 2600 jobs at risk.

Hunter has also stepped down.

This has caused investors to question if and when the company knew it was facing financial difficulty, suggesting signs should have been there long before its first profit warning.

They are likely to focus on a £30 million equity funding in December to fund the purchase of 127 convenience stores from the collapsed supply firm Palmer & Harvey.

Last week Conviviality revealed that an emergency £125 million sale had failed and that it was preparing to appoint administrators within the next 10 days.

This followed numerous profit warnings in the space of a month after the retailer admitted it forgot to add a £30 million tax bill to its financial statement, causing its projections to be way above reality.

Conviviality trades from over 700 off-licenses under and supplies over 23,000 pubs and restaurants.

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2 COMMENTS

  1. The more I read about this, the more horrified I am. And I have no connection to this company. Strikes me that Ms Hunter must be investigated, and prosecuted if necessary, and her recently sacked CFO Andrew Humphreys. And they, and the chairman David Adams and other liable directors and NEDs, should be struck off from being company directors/trustees if they are found lacking in competency. And she should pay back her several years of £1m annual fee. How did she get to be so senior? Suggests she’s a front for an investment group who are not focused on long-term shareholder wealth, just a quick buck, and she has played with the lives and livelihoods of 2500 people and their families. And what of the senior partner at KPMG – what level of responsibility has she accepted for signing this off as a going concern? The rot here is not new – either N Quayle at KPMG whose signature is on the Annual Report is equally incompetent, or equally corrupt. Not yet convinced there is a middle way.

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