A co-founder of fashion giant Boohoo has links to the Leicester factory accused of paying less than the minimum wage and failing to protect staff from the coronavirus, the Guardian can reveal.
Boohoo has confirmed that the factory at the heart of the allegations is run by Morefray Ltd, a Manchester-owned firm with ties to the separate “I Saw It First” fashion brand. The I Saw it First business was set up by Jalal Kamani, 60, who jointly founded Boohoo with his brother Mahmud, 55.
The public filings raise further questions of Boohoo after a report by the Sunday Times that claimed staff at one of the fashion company’s suppliers were paid less than minimum wage and did not have masks to protect against coronavirus. An undercover reporter working at the Morefray factory was told to expect pay of £3.50 an hour, compared with the national minimum wage of £8.72 for over-25s.
Boohoo launched an urgent investigation into its supply chain this week, saying conditions at the Leicester warehouse were “totally unacceptable and fall woefully short of any standards acceptable in any workplace”.
The company said it would look into the claims, adding that it was trying to identify the company at the centre of the allegations.
Boohoo has confirmed that the supplier was Morefray, after being approached by the Guardian.
Companies House filings suggest that Morefray is linked to Jalal Kamani, a founding director of Boohoo, who still has a small shareholding in the £3.6bn company, which is led by his brother Mahmud. According to Companies House, Morefray is 50% owned by a Manchester-based firm called I5 Holdings, which is in turn owned by Shahzad Irshad, a director of I Saw It First.
Filings also show that Irshad became the owner of I5 Holdings on 10 June, when he took control from Zogan Limited, a company that shares three current or former directors with I Saw It First, including Irshad himself. One of Zogan’s directors describes themselves on professional social media network LinkedIn as “head of tax” at Kamani Group. Jalal Kamani is a co-director of several other companies with Irshad and other directors of Zogan.
The complex ownership structure establishes ties between Morefray and I Saw It First, which Jalal Kamani founded in 2017 after helping establish Boohoo.com along with Mahmud. Jalal still owns a 0.65% stake in Boohoo, according to stock market filings, after giving stock worth £63m to his adult children in 2018.
A spokesman for I Saw It First said: “I5 Holdings Limited owns a non-controlling shareholding in Morefray Limited.” The spokesman declined to answer further questions about the company.
Someone who answered a telephone number for Morefray declined to comment.
A Boohoo spokesman confirmed that Morefray was the Boohoo supplier at the centre of the allegations but said that Mahmud Kamani had no involvement in the business.
“Morefray is a recognised supplier to Boohoo and we have never previously been aware of any allegations of paying below the minimum wage until the media report,” said Boohoo. “As a result of that report and subsequent discovery that it was Morefray and not the company in the media report we are immediately visiting the Morefray site to investigate further.”
On Wednesday, Boohoo announced an independent review of its UK supply chain.
The review, led by Alison Levitt QC, will be accompanied by a £10m investment in “eradicating malpractice” in its supply chain.
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