Leicester MP launches fresh attack on Boohoo bosses and investors

Liz Kendall, MP for Leicester West, labelled the discovery of poor working conditions within Boohoo’s Leicester supply chain earlier this year as “one of the worst environmental, social and corporate governance scandals in modern UK history”.

The etailer’s share price plummeted during the summer following revelations that workers at some of the Leicester warehouses that supply it with products were being paid as little as £3.50 per hour.

Boohoo has pledged to shore up its supply chain following an independent review of its operations by Alison Levitt QC.

The probe revealed “many failings” in its work with garment manufacturers in Leicester and recommended a series of improvements to Boohoo’s corporate governance, compliance and monitoring processes.

Boohoo has since mapped out its “agenda for change” and drafted in a number of new hires to spearhead that drive.

Last month, it appointed former Primark executive Andrew Reaney to the newly created role of responsible sourcing director, and this week it named Shaun McCabe as chair of its audit committee.

Kendall hit out, however, claiming McCabe’s appointment “will not solve fundamental governance weaknesses where boards are still in the power of an all-powerful founder chairman”.

She suggested that Boohoo’s leaders, including co-founder Kamani, “had turned a blind eye to these problems over many years” and said they were not “the right people to take the company forward”.

Kendall added that the reaction from major investors, including Jupiter Fund Management, Fidelity Investments, Invesco and Blackrock, “has so far been extremely disappointing”.

She said their pledge to engage with Boohoo “made a mockery of their promises and claims to champion responsible investment”.

By contrast, she praised the actions of Standard Life Aberdeen, which offloaded the majority of its shares in Boohoo after the revelations emerged back in July.

“This matters, because these are the companies that manage the retirement savings of millions of ordinary Britons,” Kendall said.

“Standard Life Aberdeen is to be applauded for its decisions, because fund managers need to champion responsible investing – not as the latest marketing gimmick, but because they intend to drive real change.

“Otherwise it is all just warm words and not worth the paper, or website, it is written on.”