Shareholders in the retail giant Sports Direct (SPD.L) have been urged to vote to topple its controversial chief executive Mike Ashley.
The advisory firm ISS recommended investors vote against the re-election of Mike Ashley as group CEO at the company’s annual general meeting on 11 September.
His continued position at the top of the company was “not considered warranted in light of ongoing operational, governance and risk oversight concerns,” ISS said in a report seen by Yahoo Finance UK on Thursday.
The FTSE 250 company has found itself in the headlines repeatedly for the wrong reasons in recent months.
The auditing firm Grant Thornton announced it was severing ties with the company earlier this month.
ISS said it was “not yet clear” who will replace the auditor, with Sports Direct admitting to “difficulties” working with other major firms.
The divorce after more than a decade came after several delays to Sports Direct’s results in July, in a highly unusual move that stunned the business world.
A £624m tax bill to the Belgian authorities then emerged when the results were finally published.
The company has also said its chief financial officer Jon Kempster will step down after the AGM.
ISS also raised concerns over Ashley’s attendance at meetings, warehouse working conditions, Sports Direct’s move for House of Fraser and questions over individuals’ personal links to Ashley.
“The House of Fraser acquisition has led to concerns about the Company's viability as a whole, bringing into question the effectiveness of the Group's process for evaluating risk in acquiring distressed companies,” the report noted.
It said 26-year-old Michael Murray, the partner of Mike Ashley’s daughter, was hired to manage the roll-out of certain property assets “despite an apparent lack of experience in property development.”
And it suggested Ashley had attended “fewer than 75%” of board and key committee meetings in the 2019 financial year, though he had attended scheduled board meetings.
Sports Direct has been approached for comment.