Mike Ashley, the Sports Direct boss, would likely face a shareholder revolt at the annual general meeting (AGM) of the retail giant that is scheduled this coming Wednesday.
Glass Lewis and ISS, both influential shareholder advisory groups, have both called on the investors to vote against the re-appointment of Mike Ashley as the company’s chief executive. They have also come out against Keith Hellawell, its chairman.
Ashley is currently having a hard time turning around House of Fraser after acquiring it for £90 million last August. He was slammed by Glass Lewis for overseeing many years of “poor governance” at the retailer.
ISS criticised Ashley for “continued failures” as the boss of Sports Direct and said that the plans to hand Michael Murray, the future son-in-law of Ashley, £5 million for his role as head of elevation “exacerbated” its concerns.
ISS stated that Ashley had displayed an “apparent unwillingness” to listen to the concerns of the company’s independent shareholders.
Hellawell, a former policeman, has only narrowly survived as the chairman in the face of earlier revolts thanks to the support from 61 percent shareholder Ashley.
In 2016, over half of the independent shareholders voted against him. It triggered a second vote in January 2017 where 54 percent of the independent shareholders voted against him.
In 2017, Hellawell again squeaked through because of the support of 53 percent of independent shareholders.
In a report of the ISS, it stated: “These votes of no-confidence from independent shareholders suggest that Keith Hellawell’s continuation in the position of chair is not tenable.”
A spokesperson from Sports Direct, stated: “We hope that shareholders will continue to recognise the further positive progress that we have made over the last 12 months.”
the Times reported that Ashley has urged for an Insolvency Service inquiry into the former directors of House of Fraser who he accused of “totally” misleading its warehouse operator and suppliers.
Last month, the department store chain fell into collapse with debts amounting to £884 million. £30.4 million was wed to XPO which operates two of its warehouses.
Ashley has been in discussion with Xpo regarding the debt which has hindered attempts to gets its online shopping business running again.