Frasers accuses Boohoo of undisclosed payments to founder’s son

The Frasers-Boohoo battle has left the boardroom, as Mike Ashley's Frasers Group publishes an open letter accusing Boohoo Group of making undisclosed payments of £2 million per year to Umar Kumani, the son of Boohoo co-founder and Executive Vice Chair Mahmud Kamani.

Frasers, which holds a 28.1% stake in Boohoo Group, alleged in the letter that Umar Kamani was receiving said payments for providing "consultancy services" to Boohoo subsidiary PrettyLittleThing (PLT).

The letter said: "Frasers has recently been made aware of reports alleging that Umar Kamani is receiving payments exceeding £2 million annually from PLT to a bank account in Dubai. PLT was set up by Umar Kamani and was acquired by Boohoo in 2020.

"Despite repeated requests from Frasers that the details of this consultancy arrangement be disclosed and notwithstanding the significance of the alleged amounts and apparent conflict of interest concerns, including in relation to Umar Kamani’s position as a related party to Boohoo and PLT, no details have been provided to Boohoo shareholders."

Frasers has further pressured Boohoo to provide full details of Umar Kamani’s role and reasons for remuneration.

The letter continued: "Frasers is aware that other shareholders of Boohoo have previously asked Boohoo questions relating to Umar Kamani’s position at PLT and no responses from Boohoo have been forthcoming."

On 21 January, Frasers proposed the removal of Mahmud Kamani from his board position, a motion which was "overwhelmingly" rejected by Boohoo shareholders, with 63.17% votes against.

The Sports Direct and Flannels owner was also snubbed in its attempts to revise Boohoo's board, including its failed efforts to instate Mike Ashley and Kroll's Mike Lennon onto Boohoo’s board.

The saga intensified in October, when Boohoo's CEO John Lyttle left suddenly following a series of disappointing results. Frasers is still demanding leadership changes from Boohoo, with Ashley continuing to seek a role on the board.

Boohoo has not commented on the latest allegations, but the group’s new CEO, Dan Finley, and independent chair, Tim Morris, have urged shareholders to support the current leadership structure and ignore Frasers' interference.