Mike Ashley “begs” Big 4 firms to pitch for Sports Direct’s audit contract

Mike Ashley Sports Direct auditor Grant Thornton Big 4 resignation
Sports Direct shares have fallen nearly 30% in the last year, leaving the company with a market value of £1.35bn
// Sports Direct founder Mike Ashley wants fresh talks with the Big 4 auditors
// Ashley asked Deloitte, EY, KPMG and PwC to pitch for Sports Direct’s audit contract
// Sports Direct’s auditor Grant Thornton resigned after 11 years last month

Sports Direct is reportedly pleading with the Big 4 accountants to pitch for its audit contract after warning that a smaller firm would be unable to perform the role.

The sports goods retailer, which is owned by retail tycoon Mike Ashley, has asked Deloitte, EY, KPMG and PwC to hold talks aimed at handing one of them the controversial mandate, Sky News reported.

Sports Direct’s senior independent director and chair of its board audit committee, Richard Bottomley, is aiming to persuade the Big 4 auditors to reconsider their decision to snub the role.

If the retailer cannot replace Grant Thornton, the auditor that quit last month after 11 years of serving, Sports Direct will have to resort to an untested process that could see business secretary Andrea Leadsom MP arranging the appointment of a new auditor.

In Sports Direct’s delayed annual results published in July, Ashley outlined the reasons that the largest auditors had refused to tender for the work.

According to Ashley, Deloitte already conducted tax and advisory work for Sports Direct.

EY had expressed reservations because of its role as administrator to House of Fraser, which meant a possible conflict of interest.

Meanwhile PWC had told Sports Direct it did not wish to be considered in the wake of a string of fines relating to audit work for companies such as department store chain BHS.

Ashley also wrote that KPMG had informed Sports Direct that it could not take on the work owing to “an existing portfolio of clients”.

The billionaire also said that because his group had “grown exponentially in size, geography, and complexity over recent years… we do not believe a firm outside of the Big 4 will potentially be able to cope with such an audit in the future”.

Despite all of this, Ashley seems determined to take over the high street, with Links of London being the latest retailer he has placed a bid on.

House of Fraser, Evans Cycles, Game Digital, Sofa.com and Jack Wills have all been acquired by Ashley in the last 15 months.

Sources told Sky News that Ashley was interested in acquiring Links of London as part of his attempt to transform House of Fraser – which he bought out of administration last year – into “the Harrods of the high street”.

Sports Direct shares have fallen nearly 30 per cent in the last year, leaving the company with a market value of £1.35 billion.

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