Brokers are expecting a clamour for shares in The Hut Group today as the firm begins trading in full on the stock market.
Investment platforms such as Hargreaves Lansdown and AJ Bell have reported strong demand from customers for the shares, which began ‘conditional’ trading on Wednesday.
But even as savers prepared to plough in, there was no sign of a new independent director at the firm. The Hut Group had promised an appointment to allay concerns over its governance, and increase protections for investors.
Dual role: Matthew Moulding, pictured left, is both chairman and CEO at The Hut Group
But a company spokesman declined to comment on whether an appointment was imminent, only stating that a decision would be made over the next 12 months. Andy Agathangelou, of the Transparency Task Force, said a quick appointment was vital to ensure shareholders’ interests were represented in the boardroom.
He added: ‘This person will require superhuman skills to avoid the inevitable biases and relationship-based influence on judgement which could be rife on a board of long-standing friends and associates.’ The UK Corporate Governance Code, which listed businesses are expected to follow, says at least half of a board should be independent non-executive directors.
To be ‘independent’, that person should have no material relationship with the company and not be involved in daily operations. They should also have held the role for fewer than nine years, and after six years must have their independence reviewed.
The Hut Group, which has shunned the code, only has two independent directors – Zillah Byng-Thorne and Dominic Murphy – on its six-strong board. Both have worked closely with the company and its founder Matthew Moulding for years.
Byng-Thorne was an adviser to The Hut for four years before joining the board in 2018, and Murphy helped to broker the investment by private equity giant KKR in The Hut in 2014 before joining as a director.
Several other ‘red flags’ have been raised. Moulding, 48, is both chief executive and chairman, a position banned by all corporate governance codes. He also holds a ‘golden share’, which gives him a influence over big decisions.
And Moulding is now The Hut’s landlord, having bought all of its properties into a company he controls and leased them back.
Sources close to The Hut have said Moulding’s role is key to retaining its entrepreneurial structure. They added that the property transaction was completed at a fair value, and would help to remove debt.
The Hut is likely to be popular with savers, as analysts have claimed its ecommerce technology and online retailing sites will be winners.
Its shares have already climbed 18 per cent during conditional trading since Wednesday.