Two of Sports Direct’s biggest independent investors have offloaded their entire or part of their stake in the business amid concerns over corporate governance issues.
According to The Guardian, Standard Life sold its entire 5.8 per cent holding while Aviva sold down its stake.
Standard Life was Sports Direct’s largest independent investor and, along with Aviva, it has been vocal critics of the Mike Ashley-owned retail business.
The news comes as some fund managers questioned if Sports Direct was incapable of addressing its corporate governance issues, such as excessive pay rewards, allegations of poor treatment of workers, and Ashley’s dominance.
The investors’ withdrawals also comes just days before Sports Direct’s annual general meeting (AGM) and two weeks after the retailer recorded plummeting profits of 58% in its full-year report.
READ MORE: Sports Direct profit plummets 58%
The future of chairman Keith Hellawell is also up in the air, as he had promised earlier this year that he would resign if the majority of independent shareholders did not back his re-election and the AGM.
Despite this, Sports Direct has taken a series of steps to address its problems.
According to its annual report, staff are now able to give feedback online and flag issues of concern, workers at the retailer’s from Shirebrook warehouse can now liaise with management director in monthly meetings, a new health and wellbeing service for staff has been launched, and English lessons for many of the employees at Shirebrook have been introduced.
“We have made positive progress across the business as we continue to strive to ensure that all our people are treated with dignity and respect,” Hellawell said.
“FY17 has been a transitional year for the company and for our people. It is my firm belief that Sports Direct is a company of which Britain can rightly feel very proud.
“I hope that the progress we have made over the last 12 months will be taken into account by shareholders prior to the next shareholder vote at our AGM in 2017.”