Investors have launched a lawsuit against fashion e-tailer Boohoo after allegations of modern slavery have slashed over £1 billion from its share price.
According to a group of international investors, the fast fashion giant failed to disclose serious labour rights violations in its suppliers’ factories and keep past promises for ethical production.
The wrongdoing first came to light in 2020, when an undercover reporter for The Times, worked briefly in one of Boohoo’s Leicester factories and alleged that workers were paid as little as £3.50 an hour when the minimum wage for over 25s at the time was £8.72. He also claimed that some had been made to work in unhygienic conditions during the Covid pandemic.
Since the investigation was published, Boohoo’s market value has plummeted by more than £1.5 billion.
In the claim, investors argue that those who purchased shares in the online fashion giant in the years leading up to the publishing of The Times’ exposée suffered significant losses as a result.
They also suggest that Boohoo acted in an untrue or misleading manner, and either failed to disclose or delayed the disclosure of material regarding working conditions to the market, breaching its commitments under the Financial Services and Markets Act 2000.
The Act regulates insurance business, investment services and banking in the United Kingdom.
Law firm Fox Williams said it was seeking to recover damages, plus interests and costs, for the investors, but did not give an amount.
In October, Boohoo was hit with a £100 million lawsuit from some of its investors.
A Boohoo spokesperson told TheIndustry.fashion: “We have been made aware of a claim that is being brought by certain shareholders. The company strongly contests the allegations and will vigorously defend any claim.”
