I’d do it again, insists Ashley after ‘losing’ £750,000 gamble
CONTROVeRSIAL tycoon Mike Ashley yesterday defended a gambling competition which cost his business Sports Direct £750,000 in legal fees.
The boss admitted challenging top Merrill Lynch banker Simon Mackenzie-Smith to a round of popular City game ‘Spoof’ over the bill for services during the retailer’s stock market float, which he did not believe he should have to pay.
Court papers claim Ashley was ‘bored and frustrated’ by the negotiations at a City meeting, and keen to get to London casino 50 St James.
he is said to have abruptly walked out, forcing Mackenzie-Smith to chase after him and ask about the fees.
Ashley proposed a match of spoof – where opponents try to guess the number of coins hidden by players – to decide who should pay the bill.
After the banker ‘reluctantly agreed’, Ashley lost and was forced to cough up.
In the high Court, he said: ‘I had an opportunity to save Sports Direct £750,000 and I would do it again in a heartbeat. I could have saved £750,000 but I’m not bright or lucky enough.’
The court case has provided an unparalleled insight into how Ashley allegedly runs his business – and revealed his rocky relationship with the City.
his bankers said 52-year-old Ashley was ‘like no other client that anyone at Merrill Lynch had ever come across’, while tales have emerged of drunken board meetings and profanity-filled rants about senior figures in the Square Mile.
Merrill abruptly quit as Sports Direct’s broker in 2012 over concerns that the business might have manipulated its share price when dealing with an employee bonus scheme.
Such a resignation is highly unusual in the City and would have been seen as a hammer blow to the retailer’s reputation. Jef- frey Blue – who worked at Merrill before joining Sports Direct as strategic development director, and is now suing Ashley over a contested £15m pay deal – said one of his first tasks was trying to find a replacement broker.
he said in court papers: ‘I knew, having worked at Merrill Lynch, that senior management would not have taken such a decision lightly.’ he realised just how toxic Sports Direct was when more than half a dozen firms in finance turned down the opportunity. Top firms including Barclays, Deutsche Bank, Goldman Sachs and Jp Morgan allegedly refused to bid for the lucrative contract.
Blue, 47, then claims to have held a meeting with broker Jeffries in November 2012 where his concerns deepened.
Jefferies had particular worries about Sports Direct’s ‘highly unconventional’ practice of buying shares in other large listed firms, the high Court papers suggest. The retailer had taken minority stakes in rivals and partners such as JJB Sports, umbro and Adidas – and Jefferies bosses feared investors would take a very dim view.
Sports Direct hired portuguese bank espirito Santo, a deal which Blue claims was only possible because he had previously worked with one of its senior staff members, peter Tracey.
Sports Direct shares rose 0.4pc, or 1.3p, to 294.9p yesterday.