Money-laundering accusations emerge around Leicester textile plants

By

Barbara Santamaria

Published
Oct 14, 2020

Troubling claims continue to overwhelm Leicester’ textiles industry as a civil court case uncovers the details of a money laundering scheme.

A network of textile manufacturers in the city, including firms that have supplied to Boohoo, are facing accusations of money laundering and VAT fraud.

According to the BBC, Boohoo has cut ties with the clothing supplier after it emerged that a director was involved in illegal activities, with the retail group saying it would never knowingly conduct business with anyone outside the law.

A civil lawsuit involving a dispute between the heads of two clothing manufacturers first brought the issue to light. The row involves Leicester-based company director Rostum Nagra, which has been accused of procuring false invoices and using 'shell' companies that pretended to be garment suppliers.

The case identified 14 manufacturers that “may have been involved in laundering cash”, including T&S Fashions, a firm that produced garments for Boohoo until it went bust in 2017. Boohoo told the BBC it had dealt with T&S Fashions through another company.

The list also featured another firm, Rose Fashion Leicester Limited, which supplied Boohoo’s PrettyLittleThing.
 
Boohoo said the BBC investigation led it to terminate its relationship with this supplier. "We would never knowingly conduct business with anyone acting outside of the law and we have always been swift to provide information to regulatory authorities to support any investigation that they are conducting," the group said.
 
Manchester-based Boohoo is keen on moving on from controversy about its Leicester supply chain after an independent report accused it of knowing about “endemic” problems in its garment factories. The group has promised it will do better and is preparing to publish a full list of companies in its supply chain to increase transparency.