Labour peer nets millions as investors in his collapsed Koovs fashion firm are wiped out
- Koovs went under on Tuesday in a pre-pack administration
- Its chairman, Lord Waheed Alli, bought the clothing company, saving jobs
- But small shareholders in the AIM-listed company will lose out
- Alli’s TV production company was snapped up on the very same day for £148m
The Labour peer behind collapsed fashion firm Koovs made tens of millions of pounds by selling his other company on the same day that thousands of small Koovs shareholders were wiped out.
Koovs went under on Tuesday in a pre-pack administration which ended with its chairman, Lord Waheed Alli, buying the clothing company which targeted Indian shoppers.
While the move saved jobs and protected suppliers to the online retailer, small shareholders in AIM-listed company Koovs – dubbed the Asos of India – will lose out.
Deal-making: Lord Waheed Alli
And in a move likely to irk those shareholders, Lord Alli’s TV production company Silvergate Media was snapped up on the very same day by Sony Pictures Television in a £148million deal.
Lord Alli has held hopes that Koovs – which he founded in 2012 – would replicate the success of online fashion firm Asos where he served as chairman for 12 years.
The sale of Silvergate to Sony Pictures is complex, making it difficult to establish exactly how much Lord Alli made but it is thought to be tens of millions of pounds.
Silvergate was set up in 2011 by Lord Alli and Viscount Astor, the stepfather of Samantha Cameron, after they snapped up the rights to Beatrix Potter’s Peter Rabbit series and children’s TV show The Octonauts from their former firm Chorion.
In 2016 the pair sold a 51 per cent stake to Los Angeles-based Shamrock Capital. On Tuesday Sony Pictures bought 100 per cent of Silvergate Topco Limited, whose assets include Silvergate’s 49 per cent interest in a joint venture with Chinese giant Wanda Group, which holds the rights to Octonauts.
Fashion move: Koovs was dubbed Asos of India
Sony Pictures also took a minority stake in Silvergate BP Bidco which makes the Peter Rabbit TV series.
Lord Alli, who sold £15million of Asos shares to fund Koovs in its early days, will retain a majority stake in Silvergate BP Bidco Limited.
Sources said Lord Alli bought Koovs last week for around £3million – below its £12million market value when the shares were suspended.
Koovs listed in 2014 at 200p per share, valuing it at £36million, but the stock was suspended last week at just 3p after a vital £6.5million investment from retailer Future Lifestyle Fashions Limited failed to materialise.
Lord Alli, 55, stepped in when the business failed to find alternative sources of funding, but only after it went into administration. He blames Future and is said to be willing to help fund a legal claim against it.
Lord Alli said: ‘It is always tough building a business, particularly in a new and developing market. I deeply regret this outcome for equity investors as a result of FLFL defaulting on its commitments.’
Sources close to Lord Alli said he had ploughed £20million of his own money into Koovs since founding it. He declined to comment further.