Boohoo co-founder Mahmoud Kamani has entered a battle over whether he has to testify in a $ 100 million lawsuit alleging that the online retailer used fake promotions to seduce customers.
The Aim-listed company and its other brands PrettyLittleThing and NastyGal have been charged with fake prices by making fake sales and promotions in the U.S. for at least four to five years.
A dispute over whether Kamani, who is Boohoo’s chief executive, should answer questions from sworn lawyers, threatening to embarrass the company by lifting the lid on its internal work. Emails from Kamani to staff and executives were revealed in documents filed last year in a Los Angeles court.
The case is the latest threat to Boohoo’s reputation, which is under scrutiny workers in its supply chain are being treated and for some of his commercials.
The price allegations contained in a lawsuit filed last year in the Central District of California focus on the claim that Boohoo offered U.S. customers big discounts based on inflated or “fake” original prices that were almost never the prices they used to be. asked customers to pay.
Boohoo said earlier that it intends to defend the case, but declined to comment on the latest developments.
Consumer-class prosecutors’ lawyers said earlier that the company – which also reprimanded the British Advertising Standards Agency for defrauding discount requests and using “countdown clocks” that pressure people to buy before the discount expires – could face a total compensation bill of more than $ 100 million if the claims succeed.
They said Kamani must testify because he possesses unique first-hand knowledge of the facts relevant to their claim, citing emails he sent to staff in 2019 when he took personal control of the brand’s marketing campaign in Australia.
The e-mail addresses are evidence of “the same false pricing tactics” cited in the California case, they said.
In emails, Kamani questioned the company’s marketing strategy in Australia. He wrote: “Why do we put. . .[branding]ads without mass bidding. . . WE WANT TO SELL SELL SELL. . . I’m not interested in other nonsense. “
Instructing the staff to “put mass offers on the screen”, he also said that he would approve all his marketing spending directly.
“I want to see and approve every penny,” he wrote. “We are doing this my way. . . the way it works, “he added.
Kamani co-founder Carol Kane and Boohoo CEO John Lyttle have been copied into the email chain.
Boohoo, who failed in an attempt to take the case out of court in November, opposed prosecutors’ request that Kamani answer their questions.
The company argued that he was “not normally involved in pricing individual items or making advertising decisions,” and that more junior staff familiar with the campaign should testify instead.
If Kamani is asked to answer questions, the court should limit it to two hours, he added.
The 2019 correspondence is reminiscent of an email posted in a British report on Boohoo’s dealings with suppliers, published last year. In the report, Alison Levitt, the senior lawyer in charge of the investigation, quoted in 2018 an email from Kamani to senior Boohoo managers. “We are in a mess and that needs to be fixed. . . Now I want to be at EVERY internal meeting you have with customers, ”he wrote, adding,“ The purchase will change and for now I will control it and lead it upwards. . . I want to clean up our act. ”
Levitt concluded that “it is clear that Mr. Kamani has a strong personality and may not always be aware of the effect it has on others.”