Monday 28 November 2016 11:16 am

Sports Direct accounts probe announced by watchdog

The accountancy watchdog has today launched an investigation into Sports Direct, probing into claims surrounding the relationship between the retailer and a firm run by chief exec and founder Mike Ashley's brother.

In particular, the Financial Reporting Council (FRC) is taking a closer look at the accounts for the 52 weeks to 24 April and whether the link between Sports Direct and Barlin Delivery was disclosed in the manner it should have been.

Reports emerged over the summer that Barlin Delivery was handling Sports Direct's international deliveries in return for thousands of pounds in payment, but the family link between the two companies had not been disclosed.

Companies House lists John Ashley as a director of Barlin, which was founded in February last year.

Shares in Sports Direct are currently down 2.4 per cent at 295p.

A spokesperson for Sports Direct did not immediately respond to City PM's request for comment.

Accountancy firm Grant Thornton audited the retailer's accounts for the period the watchdog is interested in.

"Grant Thornton is committed to delivering the best possible assurance services to clients and continually enhancing the quality of our audits," said Sue Almond, head of assurance at Grant Thornton UK. "The FRC and Grant Thornton have a common interest in promoting good corporate governance and reporting standards. We shall of course be co-operating fully with their investigation."

This is not the first hiccup Sports Direct has encountered this year. A report by MPs in July slammed the employment practices at the company's Shirebrook warehouse as akin to "a Victorian workhouse".

The MPs were left unimpressed again when a recent site visit ended prematurely once they uncovered a possible attempt to spy on them using a camera hidden near a plate of sandwiches, although Sports Direct later issued a statement noting the board "did not authorise or have any knowledge" of the camera.

The firm has also recently issued a string of profit warnings.

Mike Ashley, who founded Sports Direct in 1982, was appointed chief executive of the company in September, replacing Dave Forsey.