An interesting new report from The Fashion Law indicates that there may be far-reaching consequences for Kylie Jenner allegedly falsifying records to inflate her net worth, and that of the eponymous beauty company she founded in 2015.
You may recall how Jenner lost her billionaire title back in May, when Forbes — the very magazine that once crowned her as such — reported that she'd spun a "web of lies" to essentially fudge the numbers and inflate her profits by hundreds of millions. While Jenner's legal team denied those assertions at the time, the article remains online, without correction.
Related | Kylie Jenner: Get Rich or Die Following
Now The Fashion Law details a proposed lawsuit against Coty Inc, the European beauty conglomerate that acquired a majority stake in Kylie Cosmetics late last year for the enormous sum of $600 million. Coty no doubt hoped that Kylie Cosmetics would rejuvenate its brand for a Gen Z audience, and in doing so was probably relying on the very sales figures that Forbes now says were false.
"Despite being no stranger to beauty brand acquisitions, Coty did not have adequate processes and procedures in place to assess and properly value the P&G Specialty Beauty Business and Kylie Cosmetics acquisitions, [and] as a result, Coty overpaid for [them]," claims shareholder Crystal Garrett-Evans, who is suing the company's directors. Garrett-Evans claims that Coty was either "aware or severely reckless in not knowing that Coty did not have adequate processes and procedures in place to assess and properly value acquisitions." Essentially, she says that they did not do their homework and verify Jenner's billionaire claim.
Coty's stock has decreased in value since the Kylie Cosmetics acquisition and especially in light of the Forbes report, and it goes without saying that they're not seeing the profit increase you'd expect from acquiring a company with the credentials Jenner once cited. Shareholders argue Coty overpaid for all those lip kits, and it's now up to the courts to decide whether or not they could have avoided doing so.
Read the full report here.
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