Auditing Billionaire Profiteers: The Real Truth Behind Boohoo’s Dark Factories

Since October 2017 Edward Toogood has been employed by Boohoo as their “Head of Internal Audit,” and as you might expect his name actually comes up a few times in the ‘independent’ report into Boohoo’s operations that was funded by Boohoo, overseen by Alison Levitt QC, and published online on September 24, 2020.

Like any normal person you would probably assume that Boohoo’s head auditor might (at the very least) have access to the full list of companies that Boohoo uses to design and manufacture their clothes… but if you made this assumption you would be wrong.

At numerous points in Levitt’s “Independent Review into the boohoo Group PLC’s Leicester supply chain” the question comes up as to whether Boohoo kept complete lists of both their direct suppliers (tier 1 suppliers) and their subcontractors (tier 2 suppliers). After working for Boohoo for nearly three years Mr Toogood explained:

“There is certainly a list of Tier 1 suppliers. That’s easy because we have to pay them. …Tier 2 –there is a list but is it complete? Not until we have finished that mapping exercise. At the moment, no.” (p.108)

Levitt’s report however flatly contradicts this statement, noting that “we believe that he is wrong” when Toogood suggests “that there is a complete list of Tier 1 suppliers which can be relied on with confidence”. As revealed in Levitt’s report, Boohoo aren’t even keeping a list of the companies which they pay!

Furthermore, on the issue of their Tier 2 subcontractors — that is, the companies that actually manufacture most of Boohoo’s clothes — some Boohoo workers stated that such a list of these subcontractors may exist, but despite Levitt’s investigators asking for such information “on a number of occasions” such a list “was not provided.” Thus in all likelihood a list of subcontractors does not exist.

Boohoo were of course well aware of the depth of the problems in their supply chain. Certainly, such details should have come up in November 2018 when Mr Toogood “was helping to prepare Boohoo joint CEO] Carol Kane for giving evidence before the” government’s Environmental Audit Committee (EAC). At this Committee meeting the chair (in addressing Kane) said that…

“We have heard some very shocking evidence in this inquiry that garment factories in Leicester, the so-called dark factories, are supplying in particular Missguided and Boohoo and that they are flouting employment law by not paying the minimum wage.”

When asked by the chair “How many factories in Leicester do you use?” Kane quickly replied, “We currently work with 94 factories and 76 cut, make and trim units.” She added “They are all audited.”

Later when the chair asked her: “so you have a compliance team of three in Leicester making unannounced visits to every supplier. Does that happen every month?” Kane replied, “It does, yes.”

Kane, I would assert, was not being exactly truthful about her lack of knowledge about her own companies supply chain. I say this because in the course of the latest Lewitt-led (and Boohoo-funded) investigation Toogood discussed the evidence that Kane presented in 2018 at the Environmental Audit Committee meeting. Boohoo’s head auditor said:

“Some of the information from the [Boohoo] sourcing and compliance team wasn’t great. They weren’t great at reporting so I helped. When Carol referred to monthly inspections she was referring to the work of Witness 16 on the ground. I don’t think we can evidence that there were monthly inspections. They were going round, dropping in, having a chat with the owner but they weren’t recording what they were doing. I wouldn’t want to say monthly inspections. At the time I hadn’t done the work to get under what they were really doing. It is not really sustainable to have as many as 400-500 suppliers. It’s really clear to us now we’re trying to do what should always have been there and make sure everyone is audited every year at least, plus more.”

So, while Kane had firmly asserted the existence of just 170 companies in their supply chain, the reality was more like 500. So, when Kane stated that the compliance team was three people, in reality it seems that (at that time) only one person visited factories as the other two employees only worked as “administrative assistants”. Likewise, the so-called unannounced auditing visits that apparently took place every month were also fictitious.

Moreover, we should observe that the single Leicester-based “inspector” was working under the leadership of Jean Doherty, who was Boohoo’s Manchester-based “Compliance Manager” – an individual who, as highlighted in Levitt’s report, “had worked for Mahmud Kamani and Carol Kane for twenty years, since long before Boohoo started” having been appointed to this role “towards the end of 2016”. But Doherty’s LinkedIn profile is more expansive, and shows that she had in fact been employed as Boohoo’s “Senior Sourcing and Compliance Manager” between April 2014 until April 2020, having previously served before this time as Boohoo’s “Technical/QC Manager.”[1]

That Boohoo’s bosses would try to have the public believe that they had no clue about the workplace abuses occurring in their own supply chain is nigh on impossible to believe. Throughout the 1990s to the present Mahmud Kamani had worked with Carol Kane for his father’s successful textile company, Pinstripe Clothing (which was the forerunner of Boohoo). Levitt’s report noted:

“Pinstripe was a wholesale textile business which supplied brands such as New Look and Primark. Ms Kane told us that ‘We were the middlemen. We were suppliers, working with factories and selling on’. There came a point at which she and Mr Kamani decided to move away from a purely wholesale business model.” (p.28)

This makes it very clear that both Kamani and Kane were extremely familiar with the working conditions in the type of factories they used to make their fortunes. But Kamani, like Kane, prefers to play dumb to their knowledge of exploitation. Indeed, Kamani seems to be so obsessed with his own profiteering that when he was recently interviewed by Levitt as part of Boohoo’s independent investigation, he didn’t even remember who his head auditor was!?

Levitt writes that she…

“…asked Mr Kamani a series of questions which were designed to try and understand his views about what others have characterised as the dawning awareness in the company of the fact that there were serious issues in the Leicester supply chain compliance function.

I wanted to know what he thought about the September 2019 paper written by Boohoo’s internal auditor, Edward Toogood, which was presented to, and discussed at the Audit Committee meeting on 19thSeptember 2019. Edward Toogood paper had set out a number of serious concerns –for example that 84% of the Leicester and Manchester suppliers had out-of-date audits –and the discussion was Minuted with the Audit Committee meeting recording as an Action: “Review of information given to EAC versus the reality of the supplier audit status” (emphasis added).

Mr Kamani’s answers were as follows.

ALQC [Alison Levitt QC] “Did there come a time when you became concerned that you didn’t have visibility on what was happening in Leicester?”

Mahmud Kamani “No not really, I never had that concern”

ALQC “Do you remember [Edward Toogood] raising it?”

Mahmud Kamani “…….who is this guy? [Edward Toogood] who??”

ALQC “He’s your internal auditor”

Mahmud Kamani “He had some concerns did he?”

ALQC “Yes”

Mahmud Kamani “And did he make it better?”

ALQC “It’s fair to say it’s taken a while” (pp.172-3)

NOTES


[1] Prior to joining Pinstripe Clothing in early 2001 (the forerunner of Boohoo which was founded in 2006), Jean Doherty had spent around eleven years work as a “Senior QC” for another clothing company called Kastix – spending 4 years based in the UK and 7 years based on their site in Turkey. Kastix Ltd, which was headquartered in Holmfirth, West Yorkshire, had gone into receivership in 2001 having previously transferred most of their manufacturing to other countries in the previous two years. It is interesting to observe that just before Kastix Ltd went into receivership a new company was formed called Kastix Imports Ltd (which was incorporated in January 2001 and dissolved in December 2016) – a company that was owned and run by Ahmet Akin Celensu and his wife Zoe. Kastix Ltd was run by the same family, and was incorporated in 1981 and dissolved in 2016 – some fifteen years after it went into receivership. The Company Director of Kastix Ltd was Graham Martin Helm.

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