Sports Direct scrambles to hire new auditor to avoid suspension

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Sports Direct auditor Grant Thornton
Last week, Sports Direct saw its auditor Grant Thornton quit after 10 years
// Sports Direct scurries to appoint new auditor to avoid market suspension
// Last week, auditor Grant Thornton quit after 10 years of serving the sports goods retailer
// Mike Ashley has approached a number of mid-tier firms, including BDO and Mazars, about a possible tender process

Sports Direct is seeking to appoint a Big 4 auditor in a bid to avoid a possible suspension from the London Stock Exchange.

Last week, the parent company of the eponymous sportswear chain and House of Fraser and Jack Wills saw its auditor Grant Thornton quit from its role after 10 years.

The firm, which has audited Sports Direct since it floated on London’s main market in 2007, is due to step down after the retailer’s annual meeting on September 11.

The decision to quit could now result in Sports Direct becoming the first major listed business in the UK to fail to appoint an auditor.

According to the Financial Times, Sports Direct’s majority owner Mike Ashley has approached a number of mid-tier firms, including BDO and Mazars, about a possible tender process in recent days.

BDO was reportedly approached by Game executives, the video game retailer which Ashley took over June, to start a dialogue with Sports Direct.

BDO has audited Game since 2016, and has reportedly declined the invitation to audit Sports Direct.

Meanwhile, Mazars reportedly said it held “more than one conversation” with Sports Direct since Grant Thornton’s announcement.

Each of the Big 4 firms — PWC, Deloitte, KPMG and EY — have claimed to be conflicted from auditing Sports Direct, according to Financial Times.

Nevertheless, under UK Listing Authority rules, companies listed on the main London market must file audited accounts three months after the end of their financial half-year or face being suspended.

Sports Direct’s first half-year runs until the end of October, which mean it’ll have to file accounts by February 2020.

The company asked the UK government last week to clarify what it means if it fails to appoint an auditor.

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