Major Boohoo shareholders fail to denounce CEO over Leicester factory conditions
Boohoo’s major shareholders today failed to denounce the fast fashion firm’s bosses following a report into poor working practices at Leicester clothing factories.
Leicester West MP Liz Kendall called on investment firms Jupiter, Baillie Gifford and Invesco to remove chief executive John Lyttle and executive chairman Mahmud Kamani following an independent review into working conditions.
The investigation, which was conducted by Alison Levitt QC following allegations of “sweatshop” standards at the factories, found “many failings”.
Levitt recommended that Boohoo make improvements to its corporate governance, compliance and monitoring processes.
Kendall today said: “Whilst I welcome the fact the company says it will implement the recommendations of the review, I do not believe those who have for years turned a blind eye to one of the worst corporate Environmental, Social and Governance (ESG) scandals of modern times are the right people to oversee the radical changes that are now required.”
However Jupiter Asset Management, one of the e-commerce company’s biggest investors, instead said it would continue to engage with Boohoo on ESG concerns.
Baillie Gifford declined to comment on the letter, while Invesco has not yet responded to City A.M’s request for comment.
Kendall’s letter added: “It would make a mockery of any claims to support responsible investing if the same executives who allowed these appalling failures to take place, despite repeated warnings over many years, were kept in place by the shareholders.”
Levitt’s review, which was published last month, found that allegations of low pay and poor working conditions, first reported by the Sunday Times, were “not merely well-founded but substantially true”.
It also revealed that the company’s monitoring of its Leicester supply chain was “inadequate”, which was “attributable to weak corporate governance”.
In response, Lyttle said the group would implement “necessary enhancements to its supplier audit and compliance procedures, and the board’s oversight of these matters will increase significantly”.
City PM has contacted Boohoo for further comment.