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Frasers Group plc has another beef with Boohoo Group PLC.
In an open letter to Boohoo shareholders, Frasers accused Boohoo of having corporate governance issues. The example it cited for lack of transparency to shareholders is an alleged annual payment of 2 million pounds ($2.5 million) for “consultancy services” made by Boohoo brand PrettyLittleThing (PLT) to Umar Kamani, the son of Boohoo founder and executive vice chair Mahmud Kamani. Frasers cited reports alleging that the payments were made to a bank account in Dubai. The Mike Ashley-controlled Frasers also said PLT was founded by Umar Kamani, and was later acquired by Boohoo in 2020.
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The company secretary Robert Palmer said in the letter that Frasers has made repeated requests for details of the consultancy arrangement, but that no details have been provided. The letter also cited “apparent conflict of interest concerns.”
“Frasers is aware that other shareholders of Boohoo have previously asked Boohoo questions relating to Umar Kamani’s position at PLT and no responses from Boohoo have been forthcoming,” Palmer wrote.
Executives at Boohoo could not be reached by press time.
The letter was dated Jan. 22, one day after Boohoo shareholders rejected a Frasers proposal to remove chairman Mahmud Kamani from the board. Frasers last month also lost a bid to add Ashley to the Boohoo board of directors.
Ashley has been growing his stake in Boohoo since June 2023. A few months later became the firm’s largest shareholder that October. He currently has a 28 percent majority stake in Boohoo. And while the fast-fashion e-tailer has been struggling since the COVID-19 pandemic, new CEO Dan Finley—he succeeded John Lyttle, who resigned in mid-October—has found a way to get some breathing room on its balance sheet by extending the time in which it will pay certain vendors.