City institutional investor attacks Mike Ashley's Sports Direct over practices
One of the City's leading institutional investors has launched a stinging attack on Mike Ashley's Sports Direct as the tycoon faces increasing pressure over the retailer's working practices.
Royal London Asset Management, which owns a 0.18% stake in Sports Direct, said it had "lost confidence" in the firm's non-executive directors.
Mike Fox, head of sustainable investments at RLAM, said: "We have long-standing concerns about the governance of the company, and have lost confidence in the ability of the non-executive directors to govern the company and protect the interests of minority shareholders."
The intervention comes ahead of the retailer's annual general meeting (AGM) on September 7 and amid fresh concerns over its corporate governance after it was revealed that its accounts fail to disclose that international deliveries are run by Mr Ashley's brother, John.
Sports Direct pays Barlin Delivery - run by the founder's older brother - a share of the revenues generated by orders that are dispatched overseas.
Shareholder lobby group Pensions Investment and Research Consultants (Pirc) has been ramping up the pressure on Sports Direct.
It called on investors to oppose Mr Ashley's re-appointment as executive deputy chairman, following demands from MPs that he be "held accountable" for the "appalling" practices at its shops and warehouses.
Pirc, which advises clients with assets of more than £200 billion, said it also has significant concerns about Mike Ashley's "influence on the board" and whether other directors can objectively challenge and influence the board's decision-making process.
It added that chairman Keith Hellawell should also be ousted after he "failed to show leadership in a critical period for the company."
Pirc also wants shareholders to back the resolution put forward by Unite union for an independent review into the retailer's human capital strategy.
Sports Direct announced last week that thousands of its warehouse workers will collectively be handed £1 million in back pay after the retailer came clean over not paying the national minimum wage.
In a deal struck with HMRC and Unite the union, the retailer will provide payments dating back to May 2012, with some staff pocketing up to £1,000.
Mr Ashley told MPs from the Business Select Committee in June that staff were not paid during security searches at the end of their shift, meaning they took home less than the minimum wage.
The under-fire retailer said the findings of a separate independent review carried out by law firm RPC would be published in the week beginning September 5 and it would conduct a review of its board of directors by next April.