Ashley urges lie detector tests in Debenhams row
Written by Hannah McGrath
The ongoing saga over the future of Debenhams took a surreal turn yesterday after Sports Direct chief executive Mike Ashley insisted that two directors took a lie detector test, amid a last ditch attempt to block a £200 million refinancing of the struggling retailer.
Shortly before re-issuing Sports Direct’s formal offer to underwrite a £150 million rights issue for Debenhams, the retail tycoon accused the Debenhams board of “falsehoods and denials” and requested that two directors take a lie detector test over a meeting allegedly arranged to discuss Sports Direct’s role as the largest shareholder in the company.
Ashley, who has been locked in a fierce battle to seize control of the department store chain, confirmed reports that he and two other Sports Direct board members have taken their own lie detector tests.
The bizarre move comes as Debenhams prepares to forge ahead with a pre-pack administration deal, which would see shareholder value - including a 30 per cent stake held by Ashley’s Sports Direct - wiped out.
As an alternative, Sports Direct has offered the retailer a £150 million lifeline conditional on Ashley’s appointment as chief executive, the ousting of all but one board members and the write off of £148 million of debt by lenders.
In an ultimatum issued ahead of a deadline today, Debenhams gave Sports Direct until today to either walk away or make a firm takeover offer that includes arrangements to refinance its debt, or commit to either providing funding for the business or underwriting the issue of new shares.
Debenhams currently has 165 stores and 25,000 staff members, but has announced plans to close 50 stores over the next five years, putting 4,000 jobs at risk.
Debenhams declined to comment.