Boohoo in search of a new auditor as PwC stands down

Boohoo

Boohoo is in the process of searching for a new auditor after PwC stood down from the Manchester fast fashion group. 

The Financial Times reported that the accountancy firm had quit due to concerns about governance at Boohoo.

Boohoo denied that PwC, which has acted for the etailer since 2014, had quit but confirmed a search was underway for a new auditor.

“PwC has not resigned as auditor to Boohoo, but a process has recently commenced to tender for a new provider of audit services,” it said.

The move follows the publication of an independent review into Boohoo’s sourcing practices by Alison Levitt QC last month. In the review Levitt said there was “weak corporate governance” at Boohoo and that management had not done enough to ensure workers were treated fairly at its suppliers.

Boohoo manufactures around 40% of its clothing in Leicester and was the subject of an investigation by The Sunday Times during the summer which revealed that workers at a factory where Boohoo clothes were present, were paid as little as £3.50 an hour.

The company said the clothes had not been made at the factory but were sent there against its knowledge for repackaging by another supplier.

Nonetheless it commissioned Levitt to carry out the report in which she stated: “I am satisfied that Boohoo did not deliberately allow poor conditions and low pay to exist within its supply chain, nor did it intentionally profit from them.

But she added: “In truth Boohoo has not felt any real sense of responsibility for the factory workers in Leicester and the reason is a very human one: it is because they are largely invisible to them.”

Additionally the company came under fire for a new bonus scheme that would lead to top bosses at the firm banking a total bonus of £150m in shares if its share price hits 600p with co-founders Mahmud Kamani and Carol Kane set to net £50m.

The incentive scheme was not put to a vote as the company said it was not necessary according to AIM rules.