Frasers Group has demanded that Boohoo founder and executive vice-chair Mahmud Kamani be suspended from his post following claims the entrepreneur had been involved in making loans to suppliers.

The retail giant wrote an open letter to the brand’s chair Tim Morris asking for an enquiry into Kamani’s conduct to be launched immediately in light of the article by The Telegraph last week about allegations of loans.

Frasers said that “if proven, it appears that Mr Kamani may have breached his duties as a director of Boohoo and could also have committed various criminal offences”.

The group’s lawyers White & Case wrote: “Given the seriousness of the matters which have now been published by the Telegraph in the article, Frasers requests urgent reassurance from you that you will arrange for these matters to be properly and independently investigated.

“This letter has been sent to you directly due to the seriousness of the issues raised with regards to the conduct of Mr Kamani.

“Frasers considers that it is extremely important you take immediate legal advice as to the most appropriate way to have these issues investigated to ensure that you deal with them in accordance with all applicable laws.

“Frasers also considers that it is your responsibility, as well as that of the entire board of directors of boohoo, to protect boohoo and its shareholders from Mr Kamani and any of his associates who may be complicit in these matters.

“The article suggests that Mr Kamani has been involved in making loans to suppliers of boohoo (the “Suppliers”) through other companies, including Pinstripe Clothing (now trading as Pinstripe Property), a private company co-owned by Mr Kamani.

“The article further suggests that these loans appear to be repaid by the suppliers to Mr Kamani through a scheme whereby funds are taken from boohoo and instead deposited into to Mr Kamani’s personal accounts or the accounts of other companies he owns.

“Frasers also asks that boohoo suspends immediately any roles or responsibility held by Mr Kamani and any of his associates involved in this matter, pending outcome of the independent investigation.

“Boohoo should preserve all information and documents in its possession, including email and other electronic documents, that potentially relate to the matters described in this letter.

“Failing to preserve potentially relevant documents could have serious consequences for boohoo and the relevant individuals, including the incurrence of criminal liability for attempting to conceal information from law enforcement,” White & Case added.

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