Boohoo Co-Founder ‘Likely Knew’ about Leicester Sweatshops

A High Court lawsuit has claimed that Mahmud Kamani, the co-founder of Boohoo, is likely to have known about the “terrible, unsafe and unsanitary conditions” in Leicester sweatshops that supplied his business.

Lawyers have alleged that Mr Kamani was probably aware that the factories Boohoo bought its clothes from were underpaying workers and subjecting them to “arbitrary abuse and humiliation”.

They added: “It is not, the claimants say, credible that Mr Kamani was unaware of the conditions in which those factories were being operated.

“Boohoo denies the alleged knowledge of its board. The claimants say that these denials are not convincing.”

The claim arises as investors seek £177 million plus interest in compensation for a 42% collapse in Boohoo’s share price in 2020, after it was reported that staff in Leicester were earning “significantly less than the minimum wage”, with some receiving as little as £3 per hour.

Workers were also reportedly enduring long hours in cramped, dilapidated buildings.

City firm Fox Williams alleges that Mr Kamani had long-standing relationships with Leicester factory owners, attended social events with some suppliers, and even visited some of the factories himself.

They are now requesting Mr Kamani to hand over logs of his communications with his sons, Umar and Samir, arguing these messages “are highly likely to have discussed relevant matters with his sons”.

Both sons hold senior roles in Boohoo as heads of major brands.

Labour rights activists claim workers were expected to attend shifts even while sick with Covid-19, at the height of lockdown restrictions in Leicester.

The scandal wiped over £1 billion off Boohoo’s value and contributed to the company’s 42% share price fall on London’s Alternative Investment Market.

Boohoo subsequently launched a £55 million takeover of Debenhams in 2021 and rebranded under the department store’s name.

The lawsuit criticises Boohoo for failing to “take its social responsibility seriously” and claims it “did not strive for high standards in ethics throughout its supply chain” before the scandal emerged.

It also notes the Kamani family held 37% of Boohoo’s shares and says the business displayed “vestiges and traits of a family business”.

Lawyers allege the family had links to some Leicester factories, with some suppliers introduced to Boohoo by Mahmud Kamani’s brother, Jalal, the former trading director.

Boohoo’s lawyers, from Herbert Smith Freehills, said: “There is no reasonable basis to include members of the Kamani family other than Mahmud Kamani.”

Boohoo added that it “strongly contests the allegations and will vigorously defend any claim.”

The investors include the California State Teachers’ Retirement System (CalSTRS), which manages over £285 billion in pensions.