Boohoo is facing a £100m lawsuit from some investors amid allegations of modern slavery.
The fashion retailer is being targeted by City lawyers looking for compensation for shareholders who suffered heavy losses following claims of forced labour in Boohoo’s UK factories, The Telegraph reported.
It comes after £1.1billion was wiped off Boohoo’s value following modern slavery revelations in 2020, which involved a supplier in Leicester.
The claims were verified in an independent review by barrister Alison Levitt KC who found ‘allegations about poor working conditions and low rates of pay in many Leicester factories are not merely well-founded but substantially true’.
She added: ‘Boohoo’s monitoring of its Leicester supply chain was inadequate and this was attributable to weak corporate governance.’
Lawsuit: The fashion retailer is being targeted by City lawyers looking for compensation for shareholders
No claim has been filed against Boohoo yet, but the class action could go to the High Court if a settlement is not reached. Boohoo said in a statement: ‘A formal claim relating to this matter has not been made. If any proceedings are issued in relation to this, they will be robustly defended.’
Frasers Group founder Mike Ashley has been building a stake in the company for months and is now the largest shareholder with a 16.5 per cent stake.
The group, which owns Sports Direct and House of Fraser, held just 7.8 per cent of Boohoo’s shares in late August.
Boohoo shares fell 0.3 per cent, or 0.09p, to 30.25p, and are down nearly 40 per cent in the past six months.