Back in 2020, revelations that fast fashion company Boohoo was using sweatshops in Leicester, UK to produce some of its clothes, resulted in a 42 percent stock price crash that wiped more than £1 billion off the company’s market value.
Four years later, a lawsuit was launched by the California State Teachers Retirement System (CSTRS) — which invested some of its $417 billion worth of assets in the company before the news broke — seeking £177 million in compensation, plus interest, for the losses to investors.
Since then, dozens of other groups have joined the claim, as well as a new group of investors including the Bank of Korea and Stichting Shell Pensioenfonds, a multibillion-euro pension fund for Shell’s employees in the Netherlands, who are seeking an additional £10 million from Boohoo.
The investors — including the Illinois Municipal Retirement Fund and the Public Employees’ Retirement System of Mississippi — allege that Mahmud Kamani, one of Boohoo’s co-founder, must have been aware of the conditions in the Leicester factories that supplied the company before revelations surrounding the scandal led to the stock crash.
According to The Telegraph , in filings to the High Court in London, lawyers from City firm Fox Williams, representing the investors, said: “The claims stem from revelations… about underpayment of workers and unacceptable working conditions within Boohoo’s Leicester supply chain.
“The claimants allege that these (and other) matters were not properly disclosed by Boohoo when they ought to have been and that they relied on misleading/untrue statements or omissions.”
A spokesman for Boohoo told The Telegraph: “The company strongly contests the allegations and will vigorously defend any claim.”
In all, 58 investors are now suing Boohoo for a total of £245 million.
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