The founder of health and beauty chain Phillip Wain International has filed a US$32 million lawsuit against the company's major shareholder, discount cosmetics retailer Sa Sa International Holdings, for failing to honour a call option agreement. Edwin John Phillips claimed yesterday Sa Sa had made an oral commitment to purchase from him 2,000 shares of the company holding Phillip Wain in July last year. Sa Sa later acquired a 58.3 per cent stake in Phillip Wain. Under the deal, Sa Sa bought a 50 per cent stake in the company from Barry Wain, one of the club's founders. Its remaining 8.3 per cent stake came from a subscription to new shares issued by the fitness club operator. Mr Phillips said Sa Sa in fact undertook to purchase an additional 2,000 shares from him. This was to be carried out by Sa Sa exercising the call option granted by Mr Phillips to Sa Sa. The cosmetics chain then took up 7,000 shares in Phillip Wain, including the 2,000 new shares from Mr Phillips. He said he had repeatedly granted Sa Sa more time to honour its promise for over a year, but senior Sa Sa management kept making excuses. On March 27, Sa Sa chairman Simon Kwok Siu Ming asked for more time and counter-signed a letter from Mr Phillips confirming Sa Sa's promise. 'Despite such confirmation, Sa Sa failed to purchase the 2,000 shares in Phillip Wain as promised,' Mr Phillips said. His share-holding in Phillip Wain was diluted to 41.7 per cent after the acquisition. In a statement yesterday Sa Sa said Mr Phillips' allegations were groundless and would be vigorously defended.