Opposition to Mike Ashley builds ahead of Sports Direct meeting
A third proxy adviser has today recommended shareholders attempt to oust Mike Ashley at the upcoming Sports Direct annual meeting due to concerns about a string of controversies at the FTSE 250 retailer.
Institutional Shareholder Services (ISS) has joined advisory firms Glass Lewis and Pirc to recommend that investors vote against Ashley’s re-election as a director ahead of the meeting on 11 September.
Read more: Mike Ashley faces shareholder rebellion at Sports Direct AGM
The businessman, who founded the firm in 1982, owns 61 per cent of the company’s issued shares.
ISS said support for the chief executive is “not considered warranted in light of ongoing operational, governance and risk oversight concerns”, including the lack of an auditor and problems at House of Fraser.
Auditor Grant Thornton severed ties with the retailer after 12 years following unprecedented delays to the publication of its full-year results last month and the last minute revelation that Sports Direct owed Belgian tax authorities €674m.
ISS also said the acquisition of House of Fraser in August last year had “led to concerns about the company’s viability as a whole” and raised questions about the process for evaluating risk in buying troubled firms.
The issues facing House of Fraser were described as “terminal” in the company’s latest financial statements.
Ashley’s acquisition spree has also seen Sports Direct buy Evans Cycles, Sofa.com, Game and Jack Wills in the last 12 months.
Glass Lewis and Pirc cited similar concerns in their notes opposing Ashley’s re-election.
Read more: Mike Ashley’s Sports Direct buys Jack Wills
The chief executive is “inextricably linked with myriad controversies, past and ongoing”, Glass Lewis wrote.
Pirc said shareholders are “faced with a decline in profitability, loss of value for their shares [and] no dividend distribution”.
City PM has contacted Sports Direct for comment.
Main image credit: Getty