A national newspaper has reported that a high number of the people running Leicester’s textiles factories have been banned from directorships.
The Guardian said more than 50 people linked to the city’s textiles industry had currently been banned from running companies for periods of between three and 14 years.
It said information from the Insolvency Service suggested that between them the directors had been struck off for a combined total of more than 400 years in cases costing HMRC millions.
The Guardian said the figure represented four in every 10 disqualified directors of which had been companies registered on Companies House as being headquartered in the city.
It said around 1,000 of the 38,393 active companies registered in Leicester were listed as manufacturers of textiles or wearing apparel – equal to about 2.5 per cent of all businesses.
While a director can be struck off, they are not barred from owning a company if others manage it.
Fresh allegations of textiles companies in the city mistreating and underpaying workers emerged after Leicester went into local lockdown in the summer.
An undercover Sunday Times reporter alleged that he had seen poor conditions at a Leicester factory apparently making items for Boohoo.
The Sunday paper said the undercover reporter spent two days working in a factory where he was told to expect £3.50 an hour, despite the minimum wage in Britain for anyone aged 25 and over being £8.72.
Days earlier campaign group Labour Behind the Label singled out Boohoo, suggesting that conditions and work practices at some of Leicester’s small textile factories which supply it could have played a part in a localised coronavirus spike which led to an extended lockdown in the city.
The negative publicity resulted in more than £1 billion being wiped off Boohoo’s market value, while companies such as Next and Asos dropped Boohoo clothes from their websites as a result of the allegations.
In June its shares were trading at around £4.15, buoyed by people turning to the internet to shop during lockdown.
They fell to a low of around £2.10 after the Sunday Times claims.
Boohoo subsequently launched an independent review of its Leicester supply chain, led by senior lawyer Alison Levitt QC and which included a public call for evidence.
The review and its recommendation will be presented to the company on September 15 and an update published with it half year results on September 30.
