Shares of boohoo Group PLC (LON: BOO) crashed over 26% on Monday after the audit giant PricewaterhouseCoopers (PwC) is reportedly stepping down as its official auditor.
The Financial Times reported on Saturday that PwC is preparing to quit working with boohoo over concerns that the company faces scrutiny over wrongdoing in Leicester supply chain.
The fast-fashion firm had been accused of working with companies that pay workers as little as £3.50 ($4.60) an hour in Leicester. These factories are supplying boohoo with products according to findings from a review conducted by Allison Levitt QC.
Accordingly, “many failings in the Leicester supply chain” were found and Allison Levitt QC, therefore, recommended “improvements to boohoo's related corporate governance, compliance and monitoring processes.”
The embattled company released a statement this morning to confirm that PwC is still the company’s official auditor. However, this may change in the near future.
“The Group would like to place on record that PwC is still the Group's auditor at this time. The Group's Audit Committee has recently launched a competitive tender process for the Group's audit, and will update shareholders at its conclusion.
“PwC signed an unqualified opinion on the Group's 2020 Financial Statements and having served as the Group's auditor since 2014, is not participating in this process,” the company said.
Boohoo share price opened 11.5% lower on Monday before extending losses to trade more than 16% in the red. Shares now trade at the lowest levels since August.
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