Activist investor Kelso Group has hit back against The Works board’s recommendation that investors vote against appointing a new director, branding its claims “absurd”.

Kelso, which owns 10 per cent of the discount retailer, is urging shareholders to vote for former private equity executive Graeme Coulthard to join the board of the company at its annual general meeting on 7 September. Coulthard separately holds 8 per cent of The Works.

On Thursday, its board unanimously recommended shareholders vote against his appointment, suggesting that he would risk distracting management from its growth strategy, weaken the balance of independent directors and potentially destroy shareholder value.

Now, Kelso has issued its own statement. In it, the investor argued that the board’s claims are “misleading”, in particular its suggestion that Coulthard has “no executive experience in multi-site value retail operations”. Kelso noted that he was on the board of Card Factory for four years as a representative of private equity firm Charterhouse, where he oversaw rapid expansion and a successful flotation that delivered a more than fivefold return on investment.

Its statement suggests that these clams reflect poorly on the board.

The other concern raised by The Works is that Coulthard’s appointment would undermine the balance of the board. As he would not be classed as an independent director, independent non-executives would no longer make up the majority of the board.

In response, Kelso said that the board could appoint an additional non-executive director, as it has done twice within the last year.

The row is taking place as The Works continues its Elevating The Works growth strategy under the auspices of chief executive Gavin Peck.

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