Humiliation for Ashley in race to find auditor

Mike Ashley could be forced to ask the Government to find an auditor for his Sports Direct retail empire, in the latest setback for the billionaire.

The retailer has been left without an auditor after Grant Thornton quit the post at its annual shareholder meeting yesterday.

Under company law, if Ashley cannot find someone to sign off the Sports Direct books, it must tell Business Secretary Andrea Leadsom, who could then oversee an appointment. in a further blow, a third of independent shareholders voted against Ashley’s re-election as chief executive.

Ashley, 55, survived the rebellion as he is Sports Direct’s largest shareholder with a near-63pc stake. But he conceded that the past few months ‘can’t have been very comfortable’ for shareholders.

Shares are down nearly 40pc since mid-2018 and more than 70pc since their peak in 2014. The auditor troubles are set to rumble on.

Finance boss Chris Wootton said a tender process to find Grant Thornton’s replacement was ongoing but refused to give more detail.

The Big Four auditors – PwC, Deloitte, kPMG and eY – have ruled themselves out, with some concerned over governance and reputational risk associated with Ashley and Sports Direct.

Tom Powdrill of shareholder adviser PiRC, said: ‘We think the company will have to tell the Secretary of State that it has a power to appoint an auditor. This is absolutely unprecedented. This is Sports Direct all over. it has set a number of precedents, unfortunately they are all bad ones.’

Asked by a retail investor whether he would consider holding a review into corporate governance, Ashley responded: ‘100pc absolutely not.’

investors are increasingly frustrated with Ashley’s unconventional management style.

in July, he shocked the City by revealing Sports Direct had been hit by a £605m tax bill and admitted he regretted buying House of Fraser for £90m last year.

Ashley has also appointed Michael Murray, 29, who is engaged to his daughter Anna, as Sports Direct’s ‘head of elevation’.

Murray is responsible for improving the brand’s image and taking it upmarket. He also heads Flannels, a luxury department store owned by Sports Direct.

Last week, Flannels opened a four- storey department store on Oxford Street in London, stocking £3,000 limited edition Nike trainers and £3,350 Balmain gold-sequined tweed jackets.

Discussing the new shop with shareholders yesterday, Ashley said: ‘i think they are better than any other stores in the market. i just sign off the money. it has nothing to do with Mike Ashley.’

He added: ‘Please don’t buy anything. it’s genuinely eyewatering, some of the prices.’

The department for business, energy and industrial strategy declined to comment.