Ashley can’t escape a grilling from MPs
Fury as billionaire boss is ‘too busy’ to answer critics of ‘reprehensible’ tactics at Sports Direct – but not too busy to watch a football match
SPORTS Direct boss Mike Ashley will be called to account by MPs over ‘reprehensible’ business practices, said the chairman of the influential Commons committee which Ashley has so far dodged.
Parliamentarians want answers from Ashley after the collapse of Sports Direct subsidiary USC. They also want to quiz him on his widespread use of zero-hours contracts, which do not guarantee work or pay.
The chairman of the Scottish Affairs committee, Labour MP Ian Davidson, said the billionaire should not consider himself off the hook.
After the company chairman Keith Hellawell was grilled instead by MPs last week, Davidson said it was clear that Hellawell had committed Ashley to appear. Hellawell told MPs: ‘He’s never refused to come.’
Newcastle United FC owner Ashley is notorious for his abrasive, unorthodox business style which has seen him build stakes in companies as diverse as Debenhams and Rangers.
At the same time he has used his clout to gain influence – to the consternation of other investors.
MPs frustrated by the difficulty in securing a meeting with Ashley published correspondence with the firm’s lawyers that said Ashley was overseas or otherwise busy for the whole of March, in an apparent attempt to shame the firm’s founder and executive deputy chairman into agreeing a date. In response, Ashley’s lawyers complained that MPs had ‘breached his human rights’.
His appearance at St James’s Park to watch his team play Arsenal a week ago is unlikely to have eased the committee’s frustrations.
A clearly uncomfortable Hellawell faced criticisms of the company from MPs on a range of issues. They accused it of holding a supplier, Diesel, to ransom during negotiations and for providing ‘diabolical’ workers’ pensions, when compared to other FTSE 100 firms.
MPs said the company had been speaking to administrators over the fate of USC almost two months before its collapse, but workers had been given only 15 minutes’ notice of it. MPs were also angry that taxpayers had been left with a bill for £575,000, while the parent company made £240million in annual profit.
They rounded on Hellawell over the company’s use of zero-hours’ casual contracts. He admitted that they were used to employ 78 per cent of the workforce – almost 15,000 staff.
These are the contracts that David Cameron admitted to Jeremy Paxman he could not live on in an interview for Channel 4 and Sky News on Thursday. Zero-hours contracts make it difficult for workers to plan for the future and get mortgages or loans, say campaigners.
Davidson told Hellawell: ‘We’ve established that you refused to pay rent in order to strengthen your hand in negotiations and a number of other practices which were reprehensible. We’ve got to assume, not unreasonably, that a company that we’ve already established behaves extremely badly towards its suppliers and the taxpayer is also likely to behave in a less than perfect manner towards staff.’
Hellawell said of the firm’s use of zero-hours contracts: ‘It is difficult for them [staff]. But we’re finding employment for them. Many of them, if they weren’t employed by us, wouldn’t have any employment.’
Davidson said this suggested that staff were in a ‘desperate’ position and, if they had the choice, they would not be working for the firm.
But Hellawell said zero-hours contracts were liked by some workers, such as students. He also said they gave the company ‘flexibility’. However, he added that it was looking at the impact of any legislation that would restrict their use.
Former policeman Hellawell was New Labour’s ‘drugs tsar’ until 2002. He was appointed Sports Direct chairman in 2010 and is paid £155,000 a year. During the session Conservative MP Simon Reevell suggested that Hellawell had been ‘put up as a sacrifice’ before them. It was also suggested that his role in a key decision relating to the administration of USC was for ‘decoration’.
As far as Ashley being called to account is concerned, Davidson said last night: ‘After the Election a new committee will be formed. They will have five years to secure a meeting.
‘He can’t be busy every day for five years.’