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20 Oct 2020 | 18:31

Boohoo chairman buys 300,000 shares after auditor quits

(Sharecast News) - Boohoo's chairman and co-founder has bought 300,000 of its shares in a bid to demonstrate confidence in the company after its auditor quit. Mahmud Kamani bought paid 243.07p each for the shares in a deal worth £729,210. The transaction takes his stake in the fast-fashion company to 12.549%.

Neil Catto, chief financial officer, also spent almost £15,000 on 5,825 shares and Deputy Chairman Brian Small paid £25,000 for 10,000 shares.

Boohoo announced the directors' purchases after the market closed on Tuesday. The company's shares have fallen by more than a fifth since it said on Monday that PwC had quit as auditor.

Press reports have said PwC stepped down because the big four accountant was concerned about governance at Boohoo, which has been rocked by revelations of poor treatment of workers at factories that make its clothes. An independent report commissioned by the company said the accusations were true.

Boohoo shares plunged by 20% on Monday and fell a further 1.5% on Tuesday to close at 250.10p. They were trading at 400p before the scandal emerged.

Boohoo has promised to overhaul its governance, purchasing and supply chain after the report by Alison Levitt QC said there were "endemic" failings at factories in Leicester.

Before PwC's move Boohoo appeared to have recovered much of the confidence lost when its failings were revealed. PwC's decision unnerved investors in the Aim-traded company, knocking about £800m off its market value.

Kamani founded Boohoo in 2006 with fellow director Carol Kane. He is executive chairman of the company.

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