• Sports Direct board facing shareholder mutiny at next month’s AGM
  • Large stakeholders are considering voting against reappointment of chairman Keith Hellawell
  • At last year’s AGM, almost 24% of independent shareholder votes went against him
  • Comes as shareholders bid to drive change at the top of the embattled business

 

Sports Direct’s chairman and other directors are facing a mutiny from some of its largest shareholders at next month’s annual meeting.

Stakeholders are considering voting against the reappointment of Keith Hellawell, who has been chairman since 2009, and other board members in a bid to force change at the top of the under-fire retailer.

Sports Direct’s reputation has been battered this year by accusations surrounding working conditions at its Shirebrook warehouse and its use of zero-hour contracts, while financial performance has declined.

Hellawell and the retailer’s founder, Mike Ashley, were both hauled in to give evidence to MPs as part of a parliamentary inquiry, with the latter admitting that Sports Direct had become too big for him to control, claiming it had grown from a “dinghy” into “an oil tanker”.

Members of the Business, Innovation and Skills Committee have already vowed to “hold Ashley’s feet to the fire” over working practices. 

And now shareholders are mulling a move to drive change themselves by voting against Hellawell at the meeting on September 7.

At last year’s meeting, nearly 24% of independent shareholders’ votes were cast against his reappointment and he rejected calls to quit in March when Sports Direct dropped out of the FTSE 100.

A source at a large fund manager told The Guardian: “I can’t imagine the votes will be kinder to the board than they were last year, and they could be pretty striking numbers.

“It’s possible that the chairman could face a majority of independent shareholders voting against him based on last year’s result and a stiffening of the mood.

“Mike Ashley told the select committee he has not got proper command and oversight of the company, and everything we’ve seen indicates that is a fair assessment. That is a strong indictment of every member of that board.”

Rules require minority stakeholders to approve the appointment of non-exec directors at businesses who are more than 30% owned by a solitary shareholder. Ashley owns 55% of Sports Direct.

However, even if independent shareholders vote against Hellawell, the retailer can force his appointment through by holding another vote of all shareholders within a 90-day period.