Kylie Jenner's beauty brand's parent company is facing a lawsuit over allegedly "inflating" the value of Jenner's beauty brand and deceiving shareholders.
Coty currently owns a 51% stake in Kylie Cosmetics.
In a class-action suit, Coty shareholder Crystal Garrett-Evans argues that Coty engaged in "a fraudulent scheme and course of business that operated [to deceive] purchasers of Coty shares by disseminating materially false and/or misleading statements and/or concealing material adverse facts … about Coty's business, operations, and prospects."
The suit comes months after Forbes magazine accused Kylie of over inflating her brand -- and removed her billionaire status.
In a May 29, 2020 Forbes article entitled "Inside Kylie Jenner's Web of Lies- And Why She's No Longer A Billionaire," the magazine looked at the huge drop off in sales of Kylie's cosmetics after Coty's purchase of her company and concluded that:
"More likely: The business was never that big to begin with, and the Jenners have lied about it every year since 2016- including having their accountant draft tax returns with false numbers - to help juice Forbes' estimates of Kylie's earnings and net worth. While we can't prove that those documents were fake (though it's likely) it's clear that Kylie's camp has been lying."
According to the magazine a more realistic accounting of her personal fortune puts it at just under $900 million. The outlet reported further that Coty's share price of Kylie's company had fallen more than 60% since the deal had been struck.
The lawsuit also claims that Coty "overpaid" for the P&G Specialty Beauty Business and Kylie Cosmetics acquisitions and that they did not properly assessing the value of the brands.