Investor’s remarks turn up pressure on Ashley
ONE of the City’s leading institutional investors has launched a stinging attack on Mike Ashley’s Sports Direct as pressure grows over working practices.
Royal London Asset Management (RLAM), which owns a 0.18 per cent stake in Sports Direct, said it had “lost confidence” in the nonexecutive directors.
Mike Fox, head of sustainable i nvestments at RLAM, said: “We have long-standing concerns about the governance of the company, and have lost confidence in the ability of the non-executive directors to govern the company and protect the interests of minority shareholders.”
The i ntervention comes ahead of the retailer’s AGM on September 7 and after it was revealed its accounts fail to disclose that international deliveries are run by Mr Ashley’s brother, John.
Sports Direct pays Barlin Delivery – run by the founder’s older brother – a share of the revenues generated by orders that are dispatched overseas.
Shareholder lobby group Pensions Investment and Research Consultants (Pirc) has been ramping up the pressure.
It called on investors to oppose Mr Ashley reappointment as executive deputy chairman, after demands from MPs he be “held accountable” for the “appalling” practices at its shops and warehouses.
Pirc, which advises clients with assets of more than £200 billion, said it also has concerns about Mike Ashley’s “influence on the board” and whether other directors can objectively challenge and influence the decisionmaking process.
It added chairman Keith Hellawell should also be ousted after he “failed to show leadership”.
Pirc also wants shareholders to back the resolution put forward by the Unite union for an independent review into the retailer’s human capital strategy.
Last week Sports Direct’s said thousands of workers will receive back pay after it came clean over failing to pay the minimum wage.