Winding-up petition claims Farfetch sale to Coupang was rushed

Farfetch’s takeover by South Korea’s Coupang is complete but that’s not the end of the company woes.

Newspaper reports this week have said that the luxury e-tail giant has been hit by a winding up petition filed by creditors in the Cayman Islands claiming there were “serious deficiencies” in its governance.

Those creditors are owed $400m (£316m) by Farfetch, The Telegraph reported, and they believe the takeover was rushed through with management responsible for the missteps that destroyed value in the business.

They believe that as recently August the firm looked to be in “good financial health”, with forecasts of $800 million in cash by year-end. 

And the newspaper said the bondholders have urged the appointment of a liquidator. They also want “an investigation into the conduct of” José Neves, the founder-CEO of Farfetch. 

The filing claimed he “struck a bargain… in exchange for him remaining involved with or in control of the business which he founded, at the expense of the company and its stakeholders”.

The takeover of Farfetch completed this month but shareholders were wiped out in the deal.

The firm’s share price had plummeted 99% from its 2021 high by the time of its sale and there were concerns late last year over whether it would survive. The retailer had listed on the New York Stock Exchange in 2018.

The Telegraph said neither Farfetch nor Coupang have commented.