Topps Tiles has stepped up its defence of its chairman, accusing a supplier and shareholder seeking to oust him from the board of serious conflicts of interest.
MS Galleon, which has built a 29.8 per cent stake in the retailer, is seeking shareholder support to remove Darren Shapland, the chairman of Topps, at a vote at the company’s annual meeting on January 18.
MSG also wants two of its representatives, Lidia Wolfinger and Michal Bartusiak, to be appointed to the board of Topps as non-executive directors.
Topps said MSG has linked its shareholding with the level of supply that it wants Topps to source from Cersanit, a tiles manufacturer MSG owns, and wants Topps to source 29.9 per cent of its tile purchases from Cersanit.
Topps said Cersanit was uncompetitive compared with other manufacturers, that sourcing should be conducted on an arms-length basis and becoming overly reliant on a single supplier was not in the best interests of the company. Its sourcing policy does not allow for more than 10 per cent of tile purchases to come from any one supplier.
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In its update to shareholders, Topps said MSG owns Nexterio, a tiles retailer with outlets in Poland, which it understands is preparing to launch in the UK.
“Nexterio would be a direct competitor to Topps, and the board believes the appointment of non-executive directors onto the board who represent a direct competitor would be a further conflict of interest and would not be in the interests of all shareholders of Topps.”
Topps, based in Leicestershire, opened its first store in 1963 in Sale, Manchester, and has expanded to more than 300 outlets.
Shapland, 56, who joined Topps’ board in 2015 and is a former chief financial officer of J Sainsbury and chief executive of Carpetright, said: “The board continues to believe that these proposals would expose shareholders to a number of serious conflicts of interest and are not therefore in the interests of all shareholders of the company.”
Topps has received support from shareholders speaking for 41.3 per cent of the company, including Aberforth Partners, Stuart Williams, co-founder of Topps, Invesco and Axa.
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Piotr Lipko, managing director of MSG, criticised Topps last month for “performing below expectations” during Shapland’s tenure as chairman.
Shares in Topps Tiles closed down 2½p, or 5.2 per cent, at 45½p.
