The $332.5bn assets California State Teachers’ Retirement System is going after the Boohoo Group (LON:BOO) together with 48 other investors in seeking more than £100m in compensation after reports in 2020 that alleged its suppliers in Leicester were mistreating workers caused its share price to plummet.
Alison Levett QC was asked by the fashion group to conduct an independent – her review of the claims concluded that the allegations of poor working practices in the company’s supply chain, which were initially denied, were found to be substantially true.
Andrew Hill partner at lawyers Fox Williams is leading the claim for the investors, has experience in such cases, having had two shareholder claims against retail giant Tesco being settled ‘out of court’.
The claim is on behalf of investors who had bought shares in Boohoo before the 2020 report and had subsequently suffered significant losses as the group’s shares collapsed in price.
It alleges the company made untrue or misleading statements and failed to disclose or delayed the disclosure of material information about the matter to the market, breaching its obligations under the Financial Services and Markets Act 2000.
Hill reported that Boohoo has long been aware of these issues, but failed to keep to past promises of fair production, stating that:
“Boohoo is a prominent example of a company that failed to live up to its environmental, social and governance (ESG) responsibilities and caused significant harm to investors. We believe that our clients have a strong case for compensation.
This is a landmark case that will test the legal framework for securities litigation in the UK and the role of ESG factors in corporate governance and disclosure.”
