Boohoo founders buy £15m worth of shares
Boohoo co-founders Mahmud Kamani and Carol Kane have purchased £15m worth of shares after its valuation slumped following allegations of mistreatment of staff in Leicester factories.
Kamani purchased 5m shares at a price of 214p and Carol Kane bought 2m shares at the same price. Non-executive director Iain McDonald purchased 50,000 shares at 226p.
The move pushed the shares up yesterday briefly but by this morning they were trading back at 228p, close to the lows the price reached after the allegations hit.
Earlier this month The Sunday Times published a report from an undercover reporter at a factory, later identified at Morefray Ltd, in which he was offered just £3.50 an hour to work. While there he saw clothes destined for Boohoo and its subsidiary Nasty Gal.
Boohoo issued a statement to say that the clothes had not been made at the factory but had been sent there by one of its suppliers for packing against its knowledge. It subsequently announced that it had hired QC Alison Levitt to conduct an independent review of its entire supply chain.
However, despite the swift action, many investors were unconvinced and shares slumped to as low as 210p having traded for more than 400p before the allegations emerged.
Yesterday MPs wrote to Boohoo to demand answers on the allegations with chairman of the Environmental Audit Committee Rt Hon Philip Dunne MP saying it was "incredible" that the company claimed not to know what was happening. Last year Carol Kane, along with a number of other fashion leaders, was called to Parliament to account for the company's approach to its supply chain to a committee of MPs.
Dunne said: “It is incredible that over a year since the Committee highlighted illegal working practices in its supply chain, Boohoo has publicly denied any knowledge of what has been happening for years.
“Last year Boohoo told us that it was going to join the ETI. We note it has not done so.It is shameful that it took a pandemic and the ensuing outrage about working practices in their supply chain for Boohoo finally to be taken to task for turning a blind eye.
“I have today asked a number of questions to discover what the company is doing to protect its workers and to ask whether any environmental standards have been adopted to lessen the impact of fast fashion on our environment.”