Grant Thornton to quit auditor role at Mike Ashley’s “embarrassment to UK corporate governance” Sports Direct

According to the Financial Times, Grant Thornton will step down after Sports Direct’s AGM in September.

Mr Ashley’s business was labelled “an embarrassment to UK corporate governance” after the chaotic announcement of its annual results last week which included multiple delays as well as the shock revelation of the massive tax bill.

“This company is an embarrassment to UK corporate governance,” said shareholder advisory firm Pirc. “Years of ineffective chairing seem to have taken their toll, and the company veers from one mistake to the next.”

Pirc said independent shareholders had to “use everything they’ve got to push for better governance” as “this farcical behaviour has gone on for far too long”.

While Grant Thornton is not commentating on the issue, it is understood it will step away from its role as auditor in a move that will be a further blow to the reputation of Sports Direct, which has been mired in controversy for a number of years.

Earlier this month, the company blamed GT for being under increased scrutiny from the FRC for the delay in publishing its annual results.

It was reported last year that three of the Big Four firms turned down the opportunity to tender for Sports Direct’s contract because of concern over conflicts of interest or reputational risk issues.

Sports Direct is also facing difficulties in integrating House of Fraser into its business, telling shareholders that “the current uncertainty as to the future trading performance” of the high street stores had also contributed to the delay in announcing its results.

In December, Sports Direct was forced to issue a clarifying statement after Ashley stated that trading in November 2018 had been “unbelievably bad”.

The company explained that, excluding House of Fraser, Sports Direct would be within its anticipated growth range. When including it, it expected “to be behind last year’s result”.