Sports Direct shareholders block £11m payment to Mike Ashley’s brother

Shareholders at Shirebrook-based Sports Direct have voted to block an £11m payout to founder Mike Ashley’s brother.

Some 71% of shareholders voted against the proposal at a General Meeting. The company has originally decided to not pay the cash because of PR concerns.

Mike Ashley abstained from the vote.

Sports Direct said: “The board trusts that shareholders will welcome the steps taken to reassure them that John Ashley did not benefit inappropriately from being the brother of majority shareholder Mike Ashley.”

The company’s legal advisors RPC were asked by the Board earlier this year to review John Ashley’s history with Sports Direct since it floated in 2007.

Sports Direct says this review was to investigate and report on the total amounts paid in money and in kind to John Ashley, which had been called into question given his position as brother of Mike Ashley.

The report concluded that if John Ashley had been treated equally with other senior executives who helped to build the company, he would, in fact, have received additional remuneration payments of around £11m, which he was denied because of concerns at the time about public relations.

Meanwhile, this morning Sports Direct has posted its first half trading figures. Group revenue was up by 4.7% to £1.7bn, while underlying profit before tax rose by 22.9% to £88m. However, reported profit before tax slumped by over 67% to £45.8m.

Mike Ashley said: “Our high street elevation strategy is currently delivering spectacular trading performance within our flagship stores. We intend to open between 10 and 20 new flagship stores next year.

“Whilst our reported profit before tax has been impacted by fair value adjustments and transitional factors such as the disposal of assets in FY17; our underlying profit before tax remains healthy. We will continue to invest for the long-term and our net debt has increased in line with management expectations.”

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