Mike Ashley launches tirade against Sports Direct shareholders

https://www.theguardian.com/uk-news/2018/sep/14/mike-ashley-launches-tirade-against-sports-direct-shareholders

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Mike Ashley, the billionaire founder and chief executive of Sports Direct, has accused the retailer’s shareholders of stabbing him in the back and “repeatedly hounding” the former chairman Keith Hellawell.

In an extraordinary tirade, made in an official statement to the stock market, Ashley said: “It is blatantly apparent that true entrepreneurs will never be accepted in the public arena. The media circus surrounding Sports Direct … only proves that whatever progress Sports Direct makes, it will always be subject to disproportionate scrutiny and misrepresentation.”

He suggested he might stop talking to shareholders. “Despite the substantial progress made over the last few years, the shareholders have now made it extremely challenging for future engagement to take place. On the one hand they are delighted with our performance and progress, yet with the other hand they have stabbed Sports Direct and myself in the back by repeatedly hounding Keith Hellawell.”

Ashley also accused investors of failing to support him personally, after nearly 37% of independent shareholders who voted at Sports Direct’s annual shareholder meeting this week made it clear they wanted to block his reappointment as a director.

Hellawell’s announced his departure from the board less than an hour before the meeting, despite originally standing for re-election. His resignation meant the percentage of votes cast against him remaining as chairman were not revealed.

Ashley’s lengthy statement, published on Friday, indicated Hellawell had withdrawn because he did not have the support of independent shareholders. On two previous occasions those shareholders have voted to remove him.

Ashley said: “Despite this progress and the undoubted good performance of Sports Direct led by Keith Hellawell and myself, the company’s shareholders appear to be affected by the pressure of the media and certain other organisations, and they have failed to support Sports Direct, Keith and myself on this journey.”

The statement was titled: “Sports Direct and Mike Ashley stabbed in the back by shareholders.”

Ashley said he had “gone above and beyond to enable a significant leap forward in order to rebuild the reputation of Sports Direct in the City”. He said he and Hellawell had “worked tirelessly”.

One fund manager who holds shares in Sports Direct described Ashley’s rant as “Elon Musk-esque” – referring to the Tesla boss who is known for his unpredictable behaviour.

“[Sports Direct] is a company that does not fulfil most of the rules by which society works. It probably shouldn’t be a public company,” the fund manager said.

A string of investor advisory groups, including Glass Lewis, Pensions & Investment Research Consultants and Institutional Shareholder Services, raised concerns about governance at Sports Direct before the annual meeting.

Concerns related to Hellawell’s long tenure, the appointment of Ashley’s son-in-law as a consultant responsible for major property deals, and the treatment of workers. The company’s large stake in the ailing Debenhams department store group and its recent acquisition of House of Fraser after it fell into administration have also raised questions in the City about Ashley’s strategy.

On Friday Ashley said the company was facing unfair scrutiny and its strategy was working.

“Despite significant challenges within the retail sector in the UK and beyond, which have resulted in many retailers failing, Sports Direct has continued to perform well and exceed market expectations. As I stated on Wednesday, the acquisition of House of Fraser will be a game-changer. I welcome its staff and suppliers into the Sports Direct family and we look forward to building a brighter and significant future.”

He did not address the shareholder meeting in central London on Wednesday despite unexpectedly attending. The company had issued a statement less than two weeks previously saying he would not be there.

The event nevertheless ended chaotically after a senior non-executive director, Simon Bentley, appeared to suggest Sports Direct’s board had considered the possibility of buying Debenhams.

The Takeover Panel then forced Sports Direct to rush out a statement ruling out a bid within the next six months unless there was a “material change of circumstances” at Debenhams, with full agreement of the company’s board or after a bid from a third party.