Canada Markets closed

Grant Thornton Stands Down as Sports Direct Auditor

Eric Pfanner

(Bloomberg) -- Sports Direct International Plc plunged after its auditor quit without a replacement, heightening corporate governance concerns at the British retailer controlled by billionaire Mike Ashley.

Grant Thornton U.K. LLP will depart on Sept. 11, Sports Direct said. The retailer is seeking the services of a Big Four auditor, and the accounting firm is reviewing its client roster to ensure profitability, the companies said in a joint statement.

Sports Direct shares fell as much as 13% on Wednesday in London, bringing their decline over the past 12 months to more than 45%.

The company last month reported a surprise tax bill of almost $750 million, the departure of its financial chief and deepening woes at department-store chain House of Fraser. Sports Direct repeatedly delayed publishing its annual results before reporting a fall in profit.

“The shambles at Sports Direct is an endless tale, as long and convoluted as an Anglo-Saxon saga,” analyst Neil Wilson at Markets.com said in a note. The share decline follows “the latest sign of the complete and utter lack of control at the top.”

The retailer has held discussions with the U.K. government about appointing a new auditor, according to the Financial Times, after Sports Direct said in its annual results that Big Four firms declined taking on the role because of conflicts.

Sports Direct “has a longer-term aim of looking to engage a Big Four auditor in the future,” the retailer and Grant Thornton said in their joint statement.

Ashley continues to snap up struggling U.K. retailers to add to the sporting-goods chain, including apparel retailer Jack Wills earlier this month. But he faces growing doubts among investors about his ability to turn around the brands.

(Updates throughout with new statement)

--With assistance from Lisa Pham and Ellen Milligan.

To contact the reporter on this story: Eric Pfanner in London at epfanner1@bloomberg.net

To contact the editors responsible for this story: Eric Pfanner at epfanner1@bloomberg.net, John Lauerman

For more articles like this, please visit us at bloomberg.com

©2019 Bloomberg L.P.