Shamed Ashley under siege at Sports Direct

As top investors launch an unprecedented attack...

Some of the City’s most powerful institutions have launched a blistering attack on mike ashley over the way he runs Sports Direct.

they are demanding a wide-ranging review of the business following a share price slump and months of bad publicity over working practices.

one top investor is voting against the reappointment of the firm’s chairman. and it is even rumoured billionaire boss ashley could take his company private to escape the growing clamour for change.

the Investor Forum, an exclusive group of 40 asset managers, insurers and pension funds with £14.5trillion under management including £850bn in the UK, has taken the unprecedented step of publicly airing its concerns.

It is understood to have held eight meetings with the Sports Direct board since 2014, but felt its message was not getting through, leaving no other avenues.

the forum, which represents 27pc of the company’s independent shareholders – including aviva, Standard Life and Fidelity – blasted the ‘governance failings’ it said were leading to a decline in value.

executive director andy Griffiths said: ‘It is highly unusual for the Investor Forum to consider it necessary to make public their concerns and recommendations in this way.

‘ In prior situations we have always managed to work privately with companies to create effective long-term solutions.

‘We still have not received an appropriate level of commitment to respond to investor concerns and as a result the usual options have been exhausted.’

the intervention follows a brutal nine months for Sports Direct, in which its share price crashed 58.6pc since the start of December as ashley was accused of presiding over appalling working conditions and giving family members lucrative jobs.

earlier this year he was dragged before mPs and told he ran a business which operated like a ‘Victorian workhouse’.

It also emerged that ashley had hired his daughter’s partner michael murray, a former nightclub promoter, in a key consultancy role which could see him earn as much as £2.5m a year.

and Sports Direct uses a company run by the boss’s brother, John, to deliver online purchases outside the UK.

this arrangement – which nets £300,000 profit a year for his sibling’s firm – is not disclosed in its annual accounts. the chain’s auditor Grant thornton concluded there was no need to reveal the arrangement.

In a bid to pour oil on troubled waters, ashley has ordered a review into his firm’s working practices by its legal advisor RPC.

But the forum said the close relationship between the two meant this would not be sufficiently independent and demanded a much broader examination that should be announced at the company’s annual general meeting next month.

as well as employment practices, the group called for a probe into possible conflicts of interest and relationships with key suppliers.

the string of scandals at Sports Direct have been accompanied by growing fears that its chairman, former police chief Keith hellawell, is not strong enough to stand up to ashley.

City giant Legal & General Investment management has said it will vote against hellawell’s reappointment for the third year running at the aGm, as well as the reappointment of all other nonexecutive directors.

ashley, who is worth an estimated £2.4bn, is rumoured to be considering taking the company private to escape from his critics.

he will be opening his factory to the public at this year’s aGm as part of efforts to improve its damaged image.

he has a 55pc stake and it would cost him £800m to buy the rest even if no premium was attached.

hargreaves Lansdown analyst Laith Khalaf said: ‘the company appears to be on a bit of a charm offensive by opening up the doors of its Shirebrook site at its aGm, so it would be an odd juncture for mr ashley to take the company private, though anything is possible, particularly if the aGm doesn’t go to plan.’

Sports Direct did not respond to a request for comment.