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Sports Direct to appeal after judge backs criticism of management

The judge has ordered Sports Direct to produce a number of documents wanted by the Financial Reporting Council.

Newcastle United owner and Sports Direct boss Mike Ashley is considering an appeal after being dealt a blow by a High Court judge.

Mr Justice Arnold said Sports Direct managers were justifiably criticised by lawyers representing a financial watchdog which wanted documents staff thought would help in an investigation into the conduct of an auditing firm.

Lawyers representing the Financial Reporting Council had “characterised” Sports Direct’s approach as “one of obfuscation and delay verging on obstruction”, and Mr Justice Arnold said that criticism is “entirely justified”.

The judge has now ordered Sports Direct to produce a number of documents wanted by the Financial Reporting Council.

He said the council was investigating the “conduct” of auditing firm Grant Thornton in relation to the audit of Sports Direct financial statements from 2016.

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Sports Direct lawyers plan to appeal (Nick Ansell/PA)

Lawyers representing the Financial Reporting Council had complained that Sport Direct had wrongly “failed to comply” when required to provide documents.

They had asked Mr Justice Arnold to make an order “compelling compliance”.

Lawyers representing Sports Direct disputed that bosses had wrongly “failed to comply”.

Mr Justice Arnold had analysed arguments at a High Court hearing in London in July.

He published a ruling on the case, in which he said the criticism of Sports Direct was justified, on Tuesday.

A Sports Direct spokesman said lawyers were planning to mount an appeal.

“The company would like to clarify that Sports Direct itself is not the subject of an investigation by the Financial Reporting Council, which has jurisdiction over accounting firms and accounting professionals,” he said.

“Sports Direct is a witness in a Financial Reporting Council investigation.”

He added: “This court application relates to the Financial Reporting Council’s requests for the provision of certain documents.”

The spokesman said Sports Direct intended to “appeal additional aspects of the judgment in due course”.

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