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5 Oct 2020

Jim Pickard & Patricia Nilsson, Financial Times

UK: MP calls for removal of Boohoo CEO after evidence of illegal supply chain working conditions

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“MP demands removal of Boohoo chief over supply chain scandal”, 05 September 2020

A prominent MP will today write to Boohoo’s largest shareholders, demanding the removal of its chief executive and chair following evidence of illegal work conditions in its supply chain.

Liz Kendall, a shadow minister, is sending a letter to … Jupiter, Invesco and Baillie Gifford calling for the board shake-up.

It follows an independent review published last week that found widespread instances of workers making Boohoo clothes being paid less than minimum wage.

Last week’s review by Alison Levitt, a QC … found recent allegations that factories in Leicester were paying workers less than minimum wage were “well-founded and substantially true”.

It cited failures in identity verification, recording of hours, payment of wages, health and safety violations as well as instances of potential furlough fraud. She concluded that the problems were “endemic” and “exist across the best part if not the entirety of Boohoo’s Leicester supply chain”…

But she said she was “surprised by the degree of difficulty” in getting executives to provide the documents she demanded.

She also pointed out that Boohoo in June announced a plan to pay bonuses of up to £100m to its two co-founders, Mr Kamani and Carol Kane, as well as £50m to other executives.

In her letter Ms Kendall told the shareholders that she hoped they shared her concerns and would at last take action.

Jupiter, Boohoo’s largest external shareholder, and Invesco declined to comment. Baillie Gifford did not respond.