// Frasers Group boss Mike Ashley fails in court to trigger investigation into Debenhams’ finances
// Ashley’s Frasers Group formerly owned nearly a third of Debenhams’ shares
Mike Ashley has become unsuccessful in his bid to prompt an investigation into the financial affairs of struggling department store chain Debenhams.
Ashley’s Frasers Group, which once owned nearly a third of Debenhams’ shares, had its lawyers request a judge to appoint a “provisional liquidator”.
The request by Ashley was directed at Debenhams plc, which is the old plc business is in the process of dissolution and nothing to do with the existing Debenhams business or FRP Advisory as current administrators.
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Judge Mark Mullen, who considered the application at a remote hearing in the specialist Insolvency and Companies Court on Wednesday, refused Ashley’s request.
The judge said neither other Debenhams’ shareholders nor creditors were aware of the application.
He added that he would reconsider the issue at another hearing in the near future.
Debenhams has been in administration since April, for the second time within a year.
Ashley’s stake in Debenhams was wiped out when the department store first fell into administration last year, after several failed to attempts to gain control of the retailer before a consortium of banks called Celine acquired the business.
Judge Mullen said the appointment of any “provisional liquidator” was not urgent as there was no evidence to suggest that Debenhams’ assets or documents needed to be secured.
A Frasers Group barrister argued that a provisional liquidator should be appointed.
Barry Isaacs QC told the judge how Debenhams had last year borrowed around £40 million – but Frasers Group loan offers had been rebuffed.
The judge said Frasers Group had identified those “bridging facilities” as “suspicious”.
In late March, Ashley found himself apologising for a series of wrongdoings in Frasers Group’s handling of the Covid-19 pandemic.
He was criticised by MPs for emails to the government, as the country was placed on lockdown.
Frasers Group’s Sports Direct chain remained open, claiming it was essential for keeping the nation active.
It later moved to defend its stance in further correspondence before taking a u-turn and closing stores.
Last week, Frasers Group pledged to keep salary levels at 100 per cent in May for the majority of its employees.
The company has furloughed the vast majority of its staff under the government’s coronavirus job retention scheme.
Frasers Group had initially aimed to guarantee 100 per cent of employees’ full wages until April 30, above the 80 per cent provided by the government’s furlough scheme.
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