The director of a clothing supplier with links to Boohoo and Select Fashion has been involved in a money-laundering scheme, an investigation has found.

Boohoo has said it no longer works with supplier Rose Fashion Leicester Limited, which has been involved in fraudulent activity involving fake invoices and shell companies, and has previously supplied clothing to the fashion group’s subsidiary Pretty Little Thing.

A civil court  case between the bosses of two clothing suppliers first brought the brand’s former involvement with Rose Fashion to light, according to an investigation by BBC Radio 4’s File on 4, in which a judge found that at director for the supplier had been involved in “cash laundering transactions” via a previous company HKM Trading Limited.

Boohoo told the BBC it would never knowingly conduct business with anyone outside the law and that it had co-operated fully with authorities to support investigations into the suppler in question. 

A lawyer for Rose Fashion said the firm was set up after the money laundering took place and the supplier was not involved in it.

This is another blow for Boohoo, which has been accused of failing to do its due diligence when working with a number of suppliers who have paid workers below the minimum wage.

An independent investigation into the allegations found that there had been “many failings” in the retailer’s Leicester supply chain.

Boohoo appointed a responsible sourcing director earlier this month in an ongoing bid to improve its supply chain credentials.

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