Sports Direct boss charged over warehouse staff redundancies
Retailer’s chief executive Dave Forsey could face 15-year ban from being director
Dave Forsey, the chief executive of Sports Direct, has been charged with a criminal offence in relation to the controversial collapse of fashion chain USC.
The boss of the UK’s biggest sports chain, owned by the flamboyant billionaire Mike Ashley, will f ace magistrates next week in what is thought to be the first time a FTSE 100 chief has been charged under the Trade Union Act. He is accused of failing to notify authorities of plans to lay off staff.
He remains under investigation by the Insolvency Service over his behaviour in the administration of USC, which was bought back by Sports Direct debt-free in a controversial pre-pack administration, and could be banned from holding directorships for up to 15 years.
The criminal proceedings are the latest twist in a longrunning saga exposed by The
Independent where staff at USC’s Dundonald warehouse were made to pack and ship stock before being given just 15 minutes’ notice that they would lose their jobs.
Staff described incredible scenes as the warehouse’s owner, Sir Tom Hunter, sent his own workers to block the exits because of unpaid rent bills in an all-day stand-off.
Sir Tom was eventually paid off and did not make the long list of creditors.
The Government has already lost £700,000 in the administration of USC because unpaid tax bills and redundancy payments were picked up by the taxpayer.
Yesterday at an employment tribunal in Glasgow, bosses were found to have breached EU rules by not informing staff that jobs were at risk in a timely manner, meaning staff will receive an extra eight weeks’ redundancy pay – also paid by the Government. Under employment law, staff should be given at least 30 days’ notice.
Sports Direct bosses could also find themselves under fire for not informing the stock market sooner that its chief executive had been charged with a criminal offence in rela- tion to his role at the company, as the Insolvency Service revealed it first charged Mr Forsey back in July.
A court hearing, which Mr Forsey did not attend, took place last month and was adjourned. However, the boss will not be forced to come to Chesterfield Magistrates Court on Wednesday where the case is set to be heard.
Shares in the company plummeted 6.7 per cent to 689.42p yesterday following the revelations but Sports Direct remained tight-lipped, and declined to say whether bosses were confident they were not in breach of stock market rules, whether Mr Forsey will be suspended or sanctioned, or to defend any potential wrongdoing.
Earlier this year, Sports Direct’s chairman, Keith Hellawell faced a mauling at the hands of the Scottish Affairs Select Committee over the collapse of USC, which left 88 staff jobless.
During the hearing, which Mr Ashley claimed he was too busy to attend, Mr Hellawell revealed he was only informed of the administration a day before it was pushed through, despite executive board members including Mr Forsey and Mr Ashley discussing it with administrators for at least two months.
Shocked MPs described the behaviour as more akin to a “backstreet outfit” rather than a FTSE 100 company.