Boohoo founder should be investigated over debt collection, says Mike Ashley

Mike Ashley’s Frasers Group has urged Boohoo to suspend and launch an investigation into the online fashion firm’s chairman and founder over reported debt collection tactics.

Earlier this week, the Telegraph reported Mahmud Kamani sought to collect a £100,000 personal debt by taking a cut of payments to one of its jeans suppliers.

It comes amid increased friction between Frasers founder Mr Ashley and retail rival Mr Kamani in recent years.

In a letter through its legal advisers, Frasers Group – which owns an almost 29% stake in Boohoo – said it had “very serious concerns” about the reports.

In the letter, Frasers said the allegations would be “very serious and damaging to the reputation of Boohoo”.

It said: “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 therefore called for an independent investigation into the founder’s conduct and asked for the company to immediately suspend Mr Kamani and his direct associates from any roles at the business.

The Telegraph reported Mr Kamani instructed a middleman in its supply chain to deduct 20p per garment from payments to PDQ Textiles, a Manchester company with factories in Pakistan.

The article suggested Mr Kamani had made the loans to suppliers through other companies, including Pinstripe Clothing, a private business co-owned by him.

It claimed these loans appeared to be repaid by the suppliers to Mr Kamani through a scheme whereby funds were taken from Boohoo and instead deposited into to Mr Kamani’s personal accounts or those other companies he owns.

Boohoo has been contacted for comment.