What’s going on at Boohoo? Espionage allegations amid new board disputes

The last few months have been turbulent for Boohoo. Now events are coming to a head as allegations of espionage cast a shadow over the fast fashion giant. According to a report in the British newspaper Times, three current and former executives, including co-founder and CEO Mahmud Kamani, managing director Dan Finley and former CEO John Lyttle, are said to have been victims of surveillance and stalking.

The alleged espionage became public after Boohoo informed the UK data protection regulator, the Information Commissioner’s Office (ICO), about surveillance devices outside its headquarters in Manchester. A spokesperson for the ICO confirmed: “Boohoo Group has informed us of concerns regarding surveillance devices discovered at its headquarters.”

Police authorities in Manchester and Kent are currently investigating the incidents. Greater Manchester Police said the allegations were “serious” and Kent Police are investigating reported stalking incidents in the Sevenoaks region. No arrests have been made so far.

Power struggle with Frasers Group

The espionage allegations come as Boohoo is embroiled in a public power struggle with its majority shareholder, Frasers Group. Frasers has been seeking a takeover of the company since Boohoo launched a business review in mid-October. As a result, John Lyttle stepped down as CEO and Dan Finley became his successor.

Frasers expressed strong criticism of this decision and instead proposed the appointment of Mike Ashley, founder of Frasers Group, as the new CEO. Boohoo refused and accused Frasers of acting “in its own commercial interest”. Frasers, in turn, described the situation at Boohoo as a “leadership crisis”.

In a further escalation, Institutional Shareholder Services (ISS), an independent proxy advisor, has strengthened Boohoo’s position. ISS recommends that shareholders vote against the resolutions proposed by Frasers at the next general meeting. These include the appointment of Mike Ashley and restructuring expert Mike Lennon to the board.

ISS and Boohoo criticized Frasers’ proposals as “superficial” and complained that neither Ashley nor Lennon had put forward concrete plans. In addition, both are in an “obvious conflict of interest”. Boohoo emphasized that the company is pursuing a credible restructuring plan and wants to maximize shareholder value. Frasers, on the other hand, is trying to hinder the audit and destabilize the company.

The espionage allegations and the ongoing power struggle with Frasers are placing considerable strain on Boohoo. While investigations are ongoing, it remains unclear how the internal and external conflicts will impact the company’s future.

“I believe the group is fundamentally undervalued,” said Boohoo CEO Dan Finley: There is no doubt that there are huge opportunities for the group and I am committed to becoming a disruptive and industry-leading company again. In collaboration with Tim [Morris]our independent non-executive chairman, overseen by our independent board, I am fully focused on creating maximum value for all shareholders and protecting their interests.”

In response to Boohoo and ISS’s statement, a Frasers spokesperson told FashionUnited: “The ISS statement predates Mr Ashley’s statement yesterday. Mr Ashley, in his letter dated December 8th, clearly expressed his determination to work on behalf of all Boohoo shareholders and to support Dan Finley in seizing opportunities to turn around the group’s fortunes and create value for it to restore shareholders. He has made it very clear that he does not want a sale of Debenhams or a fire sale of assets, and he has put on record his commitment to transparency and shareholder consultation, something that is sorely missing under the current board. To achieve this, Boohoo shareholders must vote in favor of the resolutions on December 20th.”