Sports Direct has been instructed to transfer documents to the accountancy watchdog in the context of an investigation into the company auditor.
While bosses in the sporting goods chain held a kickback during today's annual shareholders' meeting, a judge from the Supreme Court said the company & # 39; near obstruction & # 39; was because it did not meet the requirements for the 40 documents.
Stocks fell by 5.3 percent (19.1p) to 340.9p, more pressure founder Mike Ashley prior to the AGM, with investors expected to express concerns about how the company is being run.
The Sports Direct share fell by 5.3 percent (19.1p) to 340.9p, and put more pressure on founder Mike Ashley prior to today's AGM
Ashley, 53, who also owns the Newcastle United Football Club, will skip the meeting in Soho, in the center of London, after claiming that he is too busy to have just bought House of Fraser from administration.
The verdict of the Supreme Court is yet another headache for the training suit magnate.
The Financial Reporting Council wants the documents as part of its investigation into the lucrative business deal of the retailer with a company owned by Ashley's brother.
Sports Direct had argued that the papers were protected by privilege rules, where lawyers and customers could secretly discuss matters.
The boss of Debenhams gets out
The chairman of Debenhams, Sir Ian Cheshire, has been excluded by speculation about his future. He insists that the store is not insolvent.
Debs – 29.7 percent owned by Mike Ashley – struggles with £ 4.6bn in lease obligations and has issued three profit warnings this year.
Cheshire, 59, said: "It's like having a bunch of curious neighbors looking at your house.
& # 39; Someone sees someone in a suit going to a room. The second person concludes that it is a doctor, the third person concludes that it is a funeral director and by the end of the day is the cause of death and everyone is looking forward to the funeral. & # 39;
Mr. Justice Arnold, however, disagreed with the words: & # 39; The counsel of the FRC is characterized by the Sports Direct approach to respond as one of obfuscation and delay that resembles obstruction. In my opinion, this criticism is perfectly justified. & # 39;
The FRC examines whether accountant Grant Thornton has not revealed in the Sports Direct 2016 accounts that the store has hired Ashley's brother John Ashley's Barlin Delivery business for international deliveries.
Barlin would make about £ 300,000 per year of the package.
The FRC said at the time that Barlin Delivery was not listed as a related party in financial statements.
The scheme alerted investors who regularly expressed concern about corporate governance.
Last year, shareholders blocked plans to give John Ashley a $ 11 million block. Mike Ashley said his brother was underpaid in comparison with others who contributed to building the business.
Sports Direct sells Ashley's daughter Matilda's line of cosmetics, while it is also set to pay the fiancee's daughter Anna's fiance, Michael Murray, £ 5 million for running her real estate team.
Influential shareholders' advisory group Glass Lewis has urged independent shareholders at the AGM today to vote against the re-election of both Ashley and Chairman Keith Hellawell.
It raised concerns about poor corporate governance and unsatisfactory responses to shareholder concerns.
The team also voiced concerns about regulatory concerns in Ashley's account of House of Fraser, 90 minutes after it had been under management in August. The pension regulator has confirmed that he is checking the deal.
Sport Direct said last night that it intended to challenge certain aspects of the appeal judgment. It emphasized that it was a witness in the investigation of the FRC, not its subject. The FRC regulates accountants and therefore the investigation focuses on Grant Thornton, who declined to comment.