Senior directors of Boohoo have been buying up shares in the fast-fashion retail group less than a day after the news that PwC had stood down as its auditor sent prices tumbling.
Most prominent was the group’s co-founder and executive chair Mahmud Kamani who bought up more than 300,000 shares, increasing his ownership stake in the business to 12.6%, according to The Times.
The retailer’s chief financial officer Neil Catto and his wife bought close to 60,000 shares between them, while deputy chair Brian Small snapped up over 10,000 shares.
This run on the shares occurred following the news that PwC had stepped down as Boohoo’s auditor over the weekend due to concerns over the retailer’s corporate governance. As a result, the share price dipped 1.5%.
Boohoo’s reputation has been battered following an investigation by The Sunday Times into working conditions at the Leicester factories operated by some of its suppliers.
It found that some of the warehouses were failing to pay the minimum wage, with staff earning as little as £3.50 per hour in the worst cases.
An independent review of Boohoo’s supply chain, overseen by Alison Levitt QC, uncovered “many failings” in its work with garment manufacturers in Leicester and recommended a series of improvements to its corporate governance, compliance and monitoring processes.
Levitt concluded that Boohoo “did not deliberately allow poor conditions and low pay to exist within its supply chain, it did not intentionally profit from them and its business model is not founded on exploiting workers in Leicester”.
She added that the etailer had “already made a significant start on putting things right”.
Boohoo has pledged a series of reforms, such as publishing a full list of all the companies in its supply chain and using new ethical suppliers.
Earlier this month, it emerged that Boohoo had drafted in former Primark executive Andrew Reaney to the newly created role of responsible sourcing director as it ramps up those efforts.
But Boohoo remains at the centre of the controversy. Earlier this month, shadow health minister and MP for Leicester West Liz Kendall wrote to three of Boohoo’s largest investors, Jupiter, Invesco and Baillie Gifford, urging them to oust Kamani and boss John Lyttle.
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