Wednesday, October 28, 2020

Co-founder of fashion retailer Boohoo linked to money laundering


A co-founder of Boohoo has been running a fast-fashion brand with two associates who were investigated over accusations of links to organised crime and money laundering.

Jalal Kamani, 60, now runs the I Saw it First women’s wear website and has been connected to a factory in Leicester at the heart of allegations that workers were paid below minimum wage.

I Saw It First was founded in 2017 to be the “ultimate shop for the savvy, fast fashion-obsessed females who deserve to see it first and wear it first”. It was a sponsor of Love Island on ITV.

In the year it was founded Harpreet Singh Johal, 40, a director, was arrested under a European Arrest Warrant over an inquiry by the French authorities. He submitted himself to the French in June 2018 after an extradition order was made and was later bailed. His lawyers said the warrant was later discharged by the High Court.

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A month before his arrest HMRC officials searched premises linked to Mr Johal as part of a separate French inquiry. The investigation, named Operation Bowshot in the UK, looked at “potential excise duty evasion” and the suspected “laundering of funds by organised crime in the West Midlands and London areas”, according to a judgment in proceedings against HMRC over the legality of the search warrants.

The judge heard that allegedly laundered money was thought to be from the sale of illicit imported alcohol and “other organised crime groups across the UK”. HMRC said it had lost £440 million in tax revenue since April 2010 over the alleged irregularities. Mr Johal’s lawyers said HMRC has never been able to substantiate the figure. The warrants were declared unlawful after paperwork errors but the court found that HMRC staff did not act in “bad faith”.

Until two years ago Mr Johal ran M and R Developments with Rishi Lakhani, 38, now the sole director. The company has a 25 per cent stake in I Saw It First, which is not linked to any allegation. Mr Lakhani was detained as part of the same operation. Their lawyers said “after eight years there is virtually no evidence against any suspect” and they successfully argued that the first raid was unlawful.

They have disputed the legality of further searches but an application for an injunction over material seized from one of Mr Johal’s businesses in June 2018 was rejected by the courts. Neither has been charged with any offence.

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I Saw It First’s latest accounts suggest that it lost £9.7 million in the 17 months to the end of September 2018. Two weeks ago The Sunday Times reported that workers were offered £3.50 an hour to make clothes for Boohoo, which is investigating. The factory concerned was run by Morefray Ltd. It is half owned by I5 Holdings, owned by Shahzad Irshad, a director of I Saw It First.

The head of Boohoo wrote to the government yesterday asking it to implement a licensing scheme to ensure that garment factories are fit to trade.

Mr Lakhani and Mr Johal’s spokesman said they “deny any wrongdoing whatsoever”. After HMRC searches were ruled unlawful Mr Johal had not been charged and he “has heard nothing since”. Mr Lakhani was arrested on the “spurious belief” of an unexplained lifestyle. He has not been charged, the spokesman said. I Saw It First did not respond to requests for comment.

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