ASHLEY’S BUSINESS DEAL WITH BROTHER PROBED

A LUCRATIVE business deal between Sports Direct owner Mike Ashley (pictured with his ex-wife, Linda) and his brother is being investigated by a City watchdog.

The controversial retailer has come under fire yet again after it emerged it has been paying hundreds of thousands of pounds a year to a delivery company owned by John Ashley without telling shareholders.

Barlin Delivery is registered at an upmarket detached house in a culde-sac in the seaside town of Cleethorpes, Lincolnshire. It is owned by Margaret Brown, who is listed as a director alongside John Ashley, who owns the company.

The bizarre arrangement, which was not disclosed in Sports Direct’s annual accounts but is mentioned on the firm’s website, has alarmed investors who have become increasingly worried about the way the firm is run.

They questioned why the details were kept quiet and why auditors Grant Thornton failed to ensure it was included in the company accounts.

Sports Direct says on its website that Barlin Delivery is used to deliver orders made online from outside the UK. Barlin, which was only established in February, uses delivery firm DHL to deliver goods.

It is reported to make around £300,000 a year from the arrangement, with online orders making up about 6pc of Sports Direct’s £2.9bn annual revenue.

Accounting watchdog the Financial Reporting Council yesterday confirmed it has launched a formal probe into the ‘preparation, approval and audit of the financial statements’ of Sports Direct in the year to April 24.

It added: ‘These decisions follow reports of an arrangement between Sports Direct and Barlin Delivery Limited, which was not disclosed as a related party in the company’s financial statements.’

Grant Thornton faces an unlimited fine and could be stripped of its licence if it is found to have been at fault. The firm has been auditing Sports Direct’s accounts since 2007 and was paid a fee of almost £2m last year.