MPs: Sports Direct a ‘backstreet outfit’

THE chairman of Sports Direct has exposed a raft of extraordinary practices employed by the FTSE 100 retailer, while being cross-examined by MPs.

Former policeman Keith Hellawell was also forced to defend his position saying he was more than just ‘decoration’ and that the firm, founded by executive deputy chairman Mike Ashley, was not a ‘backstreet outfit’.

The Scottish Affairs Committee is investigating the collapse of fashion chain USC, which was owned by Sports Direct.

They were told the subsidiary had withheld payment to a landlord as part of rent negotiations, held supplier Diesel to ‘ransom’ over monies owed after i t declined to provide stock, and dodged staff redundancy procedures.

Hellawell admitted he had been kept in the dark about the impending USC collapse and that Sports Direct boss Dave Forsey had been talking to administrators for almost two months without telling him.

Conservative MP Simon Reevell said: ‘That sounds not good.’

Hellawell said: ‘It sounds not good the way you say it. I don’t think [Forsey] went on a frolic on his own and kept us in the dark. I don’t think he was misleading the board. I think he was acting in the best interests of the company.’

The politicians said it sounded like the business was being run on a parallel structure with a ‘board that looks the part’ and another structure that gets on and makes all the decisions.

Reevell said: ‘You are the chairman of a FTSE 100 company, you are in that role because you bring credibility to its board as a former senior police officer.

‘We now understand that at least on one occasion the company has tried to renegotiate terms by withholding rent, it tried to force suppliers to continue supplying by withholding payment it was contractually obliged to pay – that sounds like some sort of backstreet outfit.’

Hellawell, who has little business experience, said: ‘The board will now ask some searching questions of the executives.’

He also refuted claims that Ashley had refused to give evidence despite the fact the committee requested his appearance several times.