Sports Direct shareholders could revolt

Sports Direct boss Mike Ashley faces the prospect of an embarrassing shareholder revolt this week with investors set to admonish the firm over corporate governance failures.

Two influential advisory groups have recommended shareholders vote against the billionaire’s re-election as chief executive at its annual meeting.

Sports Direct’s founder is accused of a string of questionable practices including handing millions to his daughter’s boyfriend for his role as a property consultant.

Advisory groups ISS and Pensions & Investment Research Consultants (Pirc) have also recommended voting against the re-election of chairman Keith Hellawell because he has lost shareholder confidence and failed to appoint any women directors to the board.

Mr Ashley sparked controversy after he paid £5 million to MM Prop Consultancy Limited, which is owned by Michael Murray, boyfriend of Anna Ashley.

Investors have been warned about Mr Ashley’s power over the company because he is the Sports Direct’s majority shareholder.

He does not face any real prospect of being voted out but independent investors will have a chance to express their anger over the way the firm is run.

In a note to shareholders, Pirc said: “His position on the board and level of shareholding raises significant concerns about his influence on the board and whether the other directors can objectively challenge and influence the board’s decisionmaking process.”

ISS said investors should not support the re-election of both Mr Ashley and Mr Hellawell due to the firm’s “apparent unwillingness to fully address the concerns of independent shareholders”.

Sports Direct boss Mike Ashley.