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Tuesday 15 October 2019

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Payments Awards 2019

Sports Direct auditor quits

Written by Hannah McGrath
15/08/2019

Shares in Mike Ashley’s Sports Direct fell by 10 per cent this morning after Grant Thornton confirmed it would quit as auditor of the retail empire.

The news that the accounting firm would not seek reappointment from 11 September, after 10 years in the role, comes as a fresh blow for the company after the chaotic publication of its annual results, which revealed that the company is facing a £605 million tax bill from Belgian authorities.

The annual results also showed that House of Fraser, the department store chain bought in August last year for £90 million, was facing “terminal” challenges, with Sports Direct admitting to regrets over the purchase.

The group stated that it has been looking to the “big four” auditing companies to take over its accounts, but so far has failed to confirm interest in taking up the increasingly complex task.

Last week Sports Direct confirmed it had bought out fashion retailer Jack Wills in a £12.75 million pre-pack administration deal.

In a joint statement, Grant Thornton said: “In line with the audit profession as a whole reviewing their client portfolios for, amongst other reasons, audit profitability, during a period of increased regulatory scrutiny, GT's review of its client portfolio alongside SD's future intentions on engagement of a Big 4 auditor has led to a decision by GT to not seek reappointment as SD's auditor.”

The Financial Times reported this morning that Sports Direct has written to business minister Kelly Tolhurst to ask what action the Department for Business, Energy and Industrial Strategy (BEIS) could take if the company failed to appoint an auditor.

Under the terms of the Companies Act, the BEIS secretary Andrea Leadsom could step in after a tender process. However, the department has said it has not yet received a request for this assistance.


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