Co-founder of haircare firm in court fight over coup

Martin Penny is trying to “win back” the company he says he built into a global brand and one of the UK’s most successful export successes of the past decade.

He launched his multimillion-pound battle in Manchester’s High Court against top venture capital group Montagu Private Equity.

Mr Penny says he was ousted from the board in December 2008, less than 18 months after Montagu Private Equity invested around £60m in a £160m deal in which they received a 40 per cent share in the company.

At the heart of the case is the GHD hair styling iron which has proved a popular grooming accessory for both catwalk models and everyday women alike.

In 2005 the company, which stands for Good Hair Day, won the Sunday Times Fast Track Fastest Growing Business in the UK and Mr Penny received the Ernst & Young Consumer Product Entrepreneur of the Year Award as profits and turnover kept growing.

In 2005, income was £55m with profits of £7.5m, yet by the end of 2006 this had rocketed to a turnover of £82m with £16m earnings before tax.

Mr Penny claims suitors were queuing up to buy into the business but Montagu Private Equity won the investment in 2007.

He claims that from that point on GHD’s UK sales plummeted, and there was a massive problem with counterfeit products flooding the UK marketplace.

Mr Penny brought his case at the High Court Chancery Division under the Companies Act 2006, claiming that he was unfairly prejudiced.

The case, which is expected to last several months, continues.