Who’s Behind Boohoo? Investigating Exploitation in the Garment Industry

Leicester’s sweatshop scandal is truly a tale of how millionaires and billionaires are made from the sweat and blood of ordinary workers. But don’t expect this to the story to be told in the capitalist media.

In addition to recycling the dangerous Tory lies about Leicester being too politically correct to close down the sweatshop trade, the Daily Mail (July 13) has been digging the dirt on Boohoo’s billionaire co-founder Mahmud Kamani and his wife. It turns out that the Kamani enjoys socialising and holidaying with Asheem Sobti, the director of the Leicester-based fast fashion supplier that has just been accused of failing to pay its staff anywhere near the minimum wage. As the Daily Mail article also went on to explain:

“In a statement [Boohoo] said its supplier Revolution Clothing had instructed another company Morefray Limited to fulfil an order for its brand Nasty Gal. Asheem Sobti is the sole director of Revolution Clothing, while the sole director of Morefray is Siddharth Sobti, 18, believed to be a relative. Boohoo terminated its relationship with both companies saying they had broken its code of conduct.”

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The public revelation concerning the Leicester-based Morefray Ltd had actually been exposed in an earlier investigation written-up in the Sunday Times (July 5) as “Boohoo: fashion giant faces ‘slavery’ investigation.” An undercover journalist had gained employment at the indirect Boohoo supplier where he was told he would earn £3.50 an hour: “At the factory the foreman warned: ‘These motherf***ers know how to exploit people like us. They make profits like hell and pay us in peanuts.’”[1]

But that is not all, as in addition to producing Boohoo’s clothes, Morefray has other connections to the Kamani family which come through the activities of Boohoo cofounder Jalal Kamani (who is the elder brother of Mahmud Kamani). In 2017 Jalal founded I Saw It First, a relative newcomer in the lucrative fast fashion racket whose gaudy garments were paraded before the world on the latest series of Love Island; where Jalal works with Shahzad Irshad, who is the owner of a Manchester-based firm called I5 Holdings – a company which owns 50% of Morefray.

The sole director of Morefray Ltd is Siddharth Sobti; another member of the wealthy family who recently served on Morefray’s board is Sanjeev Sobti.[2] Investigations reveal that Sanjeev himself is quite involved in running Leicester-based textile factories and he served as a board member of Trendsetters (Leic) Ltd (until it dissolved its operations in early 2017), and since last year he has managed the operations of Stitch by Stitch (Leicester) Ltd.

Here we might pause to consider the recurring issue of companies forming and then dissolving. Related to the often-temporary existence of textile factories the background of one Leicester-based boss is particularly revealing – a vocal and bullying boss who only made the news after he had gained a certain level of infamy when he was caught on camera verbally harassing a sweatshop worker who was talking to a television crew about his experience of low pay and dangerous working conditions. It turns out that the boss in question, Mahomed Hanif Musa Patel currently “owns a controlling stake” in Dariyai Products Ltd and was recently…

“…disqualified as a director for conduct while acting for Ezili Dariyai UK Limited, a garment manufacturing company headquartered on the same street as Dariyai Products that was dissolved in April this year.

“Records provided to the Guardian by the Insolvency Service show that HMRC was owed £618,059.66 by the company at the date of liquidation. As evidence that it had not been treated equally to other creditors, the authority said that over a four-year period from 2011 to 2015, Dariyai Products paid it just £58,575 out of total expenditure of more than £4m.

“According to the Insolvency Service’s 2018 document, Patel did not dispute HMRC’s account and was disqualified as a director until October 2022. He is still allowed to own shares in a company, provided he does not play a part in running it.” (July 13, The Guardian)

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So, bearing this intriguing information in mind it might be worth digging a little more into the reasons why some of the Sobti family seem to dissolve their textile businesses so regularly. For example, in reference to the family’s Leicester-based factories it would be interesting to find out why Leelam Sobti dissolved Phase-2 Clothing Ltd in 2009 and then dissolved Moreglam Ltd in 2011, before setting up Trendsetters (Leic) Ltd in 2012, which was then also dissolved some five years later.[3]

Another Boohoo-linked textile company that could perhaps do with closer examination is J&L (Leic) Ltd, which was founded in 2016 by Lukman Yusuf Patel and presently includes Boohoo cofounder Jalal Kamani on their two-person strong board of directors. And on the perplexing matter of companies mysteriously dissolving – which of course in some cases may have legitimate causes – we might point out that Patel was the only listed director of the Leicester-based textile manufacturer Cat Girl Ltd until it was dissolved earlier this year. But just months later a new textile company based at the same site arose phoenix-like out of Cat Girl’s ashes as the newly incorporated firm Shok Activewear Ltd. Finding out what is going on in such instances is surely something the media will now be looking into with a matter of some urgency.

Furthermore, in terms of future investigations Manchester is undoubtedly an important city with respect to the existence of sweatshops in the textile industry as it represents the largest textiles employment area in the UK, with Leicester playing second fiddle. Just before the pandemic broke on the UK’s shores the Guardian reported how:

“In November 2019, a scoping survey on the Greater Manchester textile and garment industry that included 182 companies operating across the region, also found evidence that workers were being paid as little as £3-4 an hour.

The survey, conducted by HomeWorkers Worldwide, a labour rights NGO, found that the garment workforce across the region was diverse with British workers employed alongside European and other migrant workers, but that many were working in insecure environments without permanent contracts. Some of the most vulnerable workers were undocumented migrants who had little recourse to public assistance or support.

“One worker quoted in the report described illegal working practices at one factory: “We’re paid in cash … instead of a bank transfer. They give us payslips but they only show 16 hours a week at £7.50 an hour, whereas in fact we’re doing many more hours than that … usually we do 40 hours a week from 8am to 6pm and we’re paid around £500 a month.”

“Other workers interviewed for the survey claim that they have been forced to hand over part of their wages to their employer, and faced demands for money in return for help with passport applications.” (The Guardian, January 23, 2020)

In terms of the sweatshop-linked textile industry in Manchester one key player who should be the subject of further scrutiny is Shahzad Irshad, if only because he serves alongside Jalal Kamani on the board room of three companies: I Saw It First, Ultimate Models Ltd, and LOTD Ltd. In the latter textile firm Irshad and Kamani are also joined by the Leicester-based factory owner Lukman Yusuf Patel.[4]

Finally, in addition to looking into the business activities of Shahzad Irshad a second person whose Manchester-based factories are worthy of closer attention is Asheem Sobti, the sweatshop profiteer/family friend of Boohoo’s cofounders. Thus, in addition to serving as a board member of Revolution Clothing Ltd and Ombre Clothing Ltd, last year Asheem Sobti became the owner of a longer standing textile manufacturer called CorporateRealm Ltd.[5]

In terms of moving forward and dealing with the ongoing exploitation of workers that takes place in the textile industry I will leave the final word to George Atwall, the Regional Organiser for the Bakers Food and Allied Workers Union who recently explained:

“We believe there is a lot of work to be done to bring an end to all sweatshops. But this is not a problem that is isolated to Leicester, it is a global problem. As we continue to point out, the Bakers’ Union believes that the government has for some time been moving in the wrong direction when it comes to strengthening workers’ rights.

“A recent report published by the Resolution Foundation demonstrated how government actions really do nothing to stop abuse of workers, noting that companies found to have been paying their staff less than the national minimum wage “rarely suffer significant financial loss” in the rare instances when the government finds out. Over the last decade the government has also slashed £100 million from the funding they provide for the Health & Safety Executive and have ordered their inspectors to carry out less workplace inspections. These actions need to be immediately addressed.

“The Bakers’ Union has no faith in the government to willingly take any serious actions to stop the existence of abusive labour practices in Leicester or anywhere else. The government only ever help workers when they come under pressure from trade unions and their members.  That is why our union will continue campaigning alongside members of the Leicester and Districts Trades Union Council to launch a broader campaign to support workers in the knitwear and garment industries. We would also encourage all workers to join a union as soon as possible so we can fight together to improve everyone’s working conditions.”

For further details about getting involved in a trade union led fightback to expose all workplace exploitation see https://www.facebook.com/leicestersocialistalternative

NOTES

[1] In a perfect illustration of the convoluted way in which Boohoo’s supply chain works, the Sunday Times (July 5) report got the name of the company who employed their undercover investigator wrong. The article wrongly identified the sweatshop employer as Jaswal Fashions Ltd when in reality the employer was Morefray Ltd.

[2] Another former director of Morefray Ltd was Jehangir Khan Muhammad Muhammad who in May 2016 became a founding director of Leicester-based Lookwear UK Ltd — a company that was dissolved the following year. He was also a former board member of Lookmark Ltd which was founded in 2014 and dissolved in 2019, and is the present board member of two textile firms in Leicester, these being Stars Gazer Ltd and Pretty Styles, both of which were founded in 2019.

[3] On Moreglam’s demise, a report from mid-2011 explained: “The Leicester-based clothes manufacturing and importing business has struggled to keep its head above water, and with debts of about £4 million has effectively drowned. Weak sales on the high street and the loss of several contracts have been cited as causes of the demise of the clothing business.”

[4] Mr Irshad helps manage other companies too, like EverythingTenQuid Ltd and Zogan Ltd (a company which includes a board member who lists her employment as being the “head of tax” for the Kamani Group).

[5] The founder of CorporateRealm Ltd was Rizwan Khan, and he served as the Secretary of this company from 1997 until 2006. Khan’s involvement in the garment trade is interesting because he is most infamous for profiting from providing care services for children in needs which is a highly lucrative industry that charges local councils up to £250,000 a year to care for a single child! An article in the Independent from 2013 noted how Khan was the CEO of Advanced Childcare which “is owned by a US fund set up by Rick Magnuson, a former banker at Nomura and Merrill Lynch”. In 2013, Khan was “thought to be the highest-paid director of the company, taking home £206,000 last year, according to the latest available figures – £42,000 more than the year before.”

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