Frasers calls for suspension of Boohoo vice chair Mahmud Kamani

(Sharecast News) - Retail conglomerate Frasers Group has written an open letter to Boohoo, calling for the suspension of executive vice chair and co-founder Mahmud Kamani and requesting an independent investigation into loans he made to the fast fashion company's suppliers. The criticism follows an article published by the Telegraph last week which alleged that Kamani made loans to suppliers through an independent private company he co-owned.

The loans were then reportedly repaid through a scheme whereby funds were taken from Boohoo and instead deposited into Kamani's personal accounts or the accounts of other companies he owns.

Kamani, who owns a 12.5% in the company he co-founded in 2006, is also alleged to have engaged in aggressive tactics to collect payments from one particular supplier, according to the Telegraph. These included demanding discounts for late payments and threatening to cancel orders if the supplier raised its prices.

"These allegations are very serious and damaging to the reputation of boohoo. If proven, it appears that Mr Kamani may have breached his duties as a director of boohoo and could also have committed various criminal offences," Frasers said in a letter from its legal advisers, White & Case.

The letter detailed alleged breaches of the Companies Act 2006, Fraud Act 2006 and Theft Act 1968, calling for an external and independent probe of Boohoo's operations.

"Frasers also asks that boohoo suspends immediately any roles or responsibility held by Mr Kamani and any of his associates involved in this matter, pending outcome of the independent investigation," said Frasers, which owns a 27% stake in Boohoo.