// Mike Ashley could face a shareholder revolt after 2 proxy advisers recommended investors oust him from the board
// ISS’s criticisms come after shareholder advisory firms Pirc and Glass Lewis also came out against Ashley
// ISS highlighted Sports Direct’s acquisition of retailers that had collapsed into administration in its report
Sports Direct founder Mike Ashley could face a shareholder rebellion at the retailer’s AGM next month after two proxy advisers recommended investors vote to oust Ashley from the board.
Advisory firm Institutional Shareholder Services (ISS) joined calls for Sports Direct investors to vote against Ashley continuing as a director amid “significant operational and governance concerns” at the company.
ISS said Sports Direct’s £90 million acquisition of House of Fraser in August last year had “led to concerns about the company’s viability as a whole”.
ISS’s criticisms come after shareholder advisory firms Pirc and Glass Lewis also came out against Ashley.
Glass Lewis said Ashley was “inextricably linked with the myriad controversies, past and ongoing” at Sports Direct.
Meanwhile Pirc advised opposing the re-election of Sports Direct chair David Daly, an ex-Nike executive, who took over last autumn, and three non-executive directors: Richard Bottomley, Nicola Frampton and David Brayshaw.
ISS raised concerns about financial deals with Ashley’s future son-in-law and Sports Direct executive Michael Murray, who received payments of over £5 million in the past year.
ISS’s report also highlighted Sports Direct’s acquisition of retailers that had collapsed into administration.
Most recently it acquired troubled fashion retailer Jack Wills for just over £12 million in a -pre-pack administration deal.
the £90 million takeover of House of Fraser last year was also done through a pre-pack administration deal.
It added that Sports Direct had failed to issue profit guidance for the year ahead after receiving an unexpected €674 million (£605 million) Belgian tax bill in its full year report.
It said the tax bill had resulted in “further uncertainty” that ultimately led to Sports Direct’s auditor Grant Thornton announcing its resignation.
The auditor will resign at the annual meeting on September 11, while Sports Direct scrambles to find a replacement.
The accounting firm is already under investigation over Sports Direct’s failure to disclose a transaction with a company owned by Ashley’s brother.
Meanwhile, Sports Direct’s shares have dropped to 247p from about 400p a year ago.
In response, Ashley has slammed investors for stabbing him in the back and “repeatedly hounding” former chair Keith Hellawell.
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