Ashley stopped from paying brother £11m

SpoRTS Direct boss Mike Ashley has been given a bloody nose by shareholders who blocked plans to pay his brother £11m.

In an embarrassment to the 53year-old retail tycoon, independent investors voted overwhelmingly against a payout to John Ashley at a special meeting at the Sports Direct headquarters in Shirebrook, Derbyshire.

Sports Direct had claimed that John Ashley, 56, was owed £11m because he had been underpaid for work at the company.

But 71pc of shareholders rejected the payment in just the latest clash between Mike Ashley

(pictured) and big battalion investors in the City. Sports Direct said it accepted the decision and intends to move on.

John Ashley joined the retailer in 1989 to head its IT department until 2015 when he left. He has since rejoined Sports Direct to work in a similar role.

The row over John Ashley’s earnings erupted after it emerged that Sports Direct was paying a company he owned to deliver online orders outside the UK.

In a bid to stem a rising tide of criticism, Mike Ashley ordered the company’s legal advisers RpC and independent accountants Smith & Williamson to look into how fairly his brother had been treated since Sports Direct listed on the stock exchange in London in 2007. The findings claimed John Ashley was not paid the same as other directors due to concerns that there would be a backlash in the press.

The report said that if he had been treated equally he would have been paid £11m more. Mike Ashley, who founded Sports Direct and owns 61pc of the shares, agreed not to take part in yesterday’s vote as to whether his brother should get the £11m.

In a statement after the vote, the company said: ‘The board trusts that shareholders will welcome the steps taken to reassure them that John Ashley did not benefit inappropriately from being the brother of majority shareholder Mike Ashley.

‘In fact, John was actually disadvantaged by approximately £11m after he forewent bonuses that he would have received if he were treated equally to other executives who helped to build the company.

‘By voluntarily abstaining from voting on this issue, the board has provided the company’s independent shareholders the opportunity to determine whether or not to make a retrospective payment to John Ashley. The board respects the views of independent shareholders, and considers all these matters to be closed. We now intend to move on.’

The vote marks the end of another tumultuous year for the Sports Direct boss.

Earlier this year Mike Ashley was the subject of a high-profile court case involving a dispute over a £15m deal done in a pub.

During a meeting at a pub in London, investment banker Jeffrey Blue said he was promised the mammoth payout by Ashley if he helped boost Sports Direct’s market price to £8 per share.

Blue was seeking £14m in damages after receiving just £1m from Mike Ashley.

Despite the judge ruling in favour of the Sports Direct boss, evidence heard by the court painted a stark picture of how Ashley does business.

A self-confessed ‘powerdrinker’, Ashley boasted that he had drank about five pints of beer within an hour during his meeting with Blue.