19th Oct 2020 10:02
(Alliance News) - boohoo Group PLC on Monday addressed press reports auditor PricewaterhouseCoopers will quit due to concerns about the online fashion retailer's reputation.
boohoo's update on Monday also comes in the wake of the Sunday Times reporting the National Crime Agency has commenced a money laundering and fraud investigation into some of the retailer's suppliers.
Shares in boohoo were trading 14% lower at 272.30 pence each on Monday morning in London.
Citing two people familiar with the matter, the Financial Times on Friday reported PwC has signalled its intention to quit as boohoo's auditor.
In response, the fast fashion company said on Monday that PwC "remains its auditor at this time".
"The group's audit committee has recently launched a competitive tender process for the group's audit, and will update shareholders at its conclusion. PwC signed an unqualified opinion on the group's 2020 financial statements and having served as the group's auditor since 2014, is not participating in this process," it added.
boohoo recently arranged for an independent probe of its supply chain and in September said it would make "substantive, long-lasting and meaningful change".
The review was launched by boohoo in July following claims it sold clothes made in factories where staff were paid less than the minimum wage.
The Sunday Times newspaper had reported allegations that workers in Leicester's Jaswal Fashions factory making clothes for boohoo brand Nasty Gal were being paid as little as GBP3.50 an hour and operating without social distancing measures in place.
boohoo denied Jaswal Fashions was ever a supplier, however.
Separately on Sunday, the Sunday Times reported the National Crime Agency is investigating companies that supply boohoo, over suspicions of money laundering and VAT fraud.
The agency is looking into the Leicester textile industry, with NCA officials saying they have evidence from whistleblowers in the city's garment factories, who provided documents that detail alleged money laundering and VAT fraud.
Last week Wednesday, boohoo confirmed it ended its relationship with a Leicester-based firm which was linked with fraud and money laundering.
A probe by the BBC found a network of companies based in Leicester have been involved in VAT fraud and money laundering.
boohoo said that earlier in October, it dropped Rose Fashions as a supplier after the BBC found one of the Leicester-based firm's directors was part of a money-laundering network.
A court case in 2018 found that Hassan Malik, who in 2018 set-up Rose Fashions, also had entered into "cash laundering transactions" with Rostum Nagra. Nagra was a director at other Leicester-based firms implicated by the BBC probe. The BBC said its investigation found that Nagra is currently an employee at Rose Fashions.
"We would never knowingly conduct business with anyone acting outside of the law and we have always been swift to provide information to regulatory authorities to support any investigation that they are conducting," a boohoo spokesperson said last week Wednesday.
By Ife Taiwo; ifetaiwo@alliancenews.com
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