Wed, 11th Sep 2019
Almost one third of the independent investors in Sports Direct have voted against keeping Mike Ashley as the chief executive of the company, following criticism of the company’s governance.
Ashley currently controls 62% of the company, however 31% of the other shareholders who voted at the annual meeting earlier this week were against Ashley continuing as chief executive. The vote came just after Sports Direct admitted that it no longer has an auditor. Grant Thornton resigned from the role at the retailer’s shareholder meeting, and so far Sports Direct has not found another auditing form to take on the job.
Grant Thornton stepped down following the release of the company’s annual results in July. The results were more than ten hours late, and the company said that it could not issue profit guidance for the upcoming year, as it had received a significant, and unexpected, tax bill from Belgium. The finance director for Sorts Direct has also stepped down.
At the general meeting, the incoming new finance director, Chris Wootton, said that the company was going through a process to appoint a new auditor, however he did not specify how long he expected the process to take.
Sports Direct is now required, under the Companies Act, to inform business secretary Andrea Leadsom that it has failed to appoint an auditor. The company has one week to do so, otherwise they will be faced with a fine. Leadsom has the ability to appoint an auditor for the company, and if one is not in place before the company’s interim results in December then she may be forced to step in.