Sports Direct owner and founder Mike Ashley is being sued by a Mr Jeff Blue for £14m following an alleged deal made after “a considerable amount of alcohol” had been consumed.
According to a court document seen by The Times, Blue alleges that Mike Ashley offered him £15m, whilst drinking in the Horse and Groom pub in Great Portland Street, to repair Sports Direct’s relationship with London City banks.
The meeting took place in 2013, a time when Sports Direct struggled to find a broker. Merrill Lynch quit over corporate governance concerns, whilst Citibank, Deutsche Bank, Goldman Sachs, Jefferies, JP Morgan and Nomura refused to work with Mike Ashley due to a “reputational risk.”
As such, Blue was supposedly offered the £15m to repair this relationship with the city and double Sports Direct’s share price.
“What should I do to incentivise Jeff?” Ashley said, according to Blue’s account, “If he can get the stock to £8 per share why should I give a f**k how much I have to pay him […] I will have made so much money it doesn’t matter.”
This news comes at a dire time for Sports Direct, a mere three days after it issued a profits warning following poor Christmas sales, and in the Jetstream of controversies. In December news broke that Sports Direct had been paying its warehouse workers effectively below minimum wage.
In the period following the meeting, Blue claims that his former colleague Peter Tracey, the then Head of Corporate Banking, was persuaded to meet with Ashley, and a number of banks agreed to work with Sports Direct. Blue said that in the subsequent months interest and investment in Sports Direct rose enough to qualify him for the £15m “incentive”, but so far he has only received £1m.