Sports Direct rebels against Goals Soccer Center directors
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Sports Direct threatened to vote against the reappointment of all directors of Goals Soccer Centers, the ailing soccer field operator who is 19% owned by Mike Ashley’s group.
Goals, who manages five-party pitches, was plunged into crisis in March after discovering he owed more than £ 12million in unpaid taxes. His actions were suspended and chief executive Andy Anson announced in May that he was leaving to take over as head of the British Olympic Association.
According to Sports Direct, Goals’ lenders have appointed consulting firm Deloitte to conduct an internal investigation, but have not clarified whether this will be shared beyond creditors and directors.
Sports Direct argues that this is unacceptable, in part because Christopher Mills, another significant shareholder, is also a non-executive director of the company.
“[Sports Direct] wants the slate to be cleared and will vote against all resolutions at next week’s AGM, ”said a person briefed on the company’s intentions.
In a letter to Goals chairman Michael Bolingbroke seen by the Financial Times, Sports Direct said the company should consent to what it appoints Kroll to investigate the issue of value added tax and other issues. questions, and commit to making the report public.
He added that Mr Mills was “likely to be aware of information that others are not and may even be able to influence the investigation.”
Mr Mills, in whom Harwood Capital owns a similarly sized stake to Sports Direct, said it was absurd to say he would use inside information inappropriately or attempt to influence the investigation. “The council is trying to sort out a real mess here,” he said, adding that Mr Ashley’s intervention was “unnecessary”.
Sports Direct, which has no representation on Goals’ board of directors, gave the company until the end of Wednesday to reconsider its position on a Kroll investigation,
which Sports Direct claims to have so far resisted.
In response, Goals said he hired forensic accountants to “analyze historical accounting errors” and work with Deloitte and its lenders to assess “the company’s future options.” “The board believes it does not need to appoint other advisers at this time,” he said.
Sports Direct declined to comment.
This is the latest in a series of Sports Direct interventions in companies where it has significant stakes but has, in the past, argued that it has no influence over management.
He waged a long campaign against the department store chain Debenhams, where he had a 29% stake, removing its chairman and CEO from the board of directors and resisting the takeover of Debenhams by its lenders in a “pre-pack administration” ” in April.
It increased its stake in Findel, a catalog retailer, to more than 50 percent, although a mandatory takeover bid from minority investors did not garner much support. Earlier this month, it launched a similar mandatory offering for Game Digital, which operates gaming zones in select Sports Direct stores. Game Digital has not yet issued a formal response to the offer.
Sports Direct’s strategic investments have long puzzled analysts. The company maintains that they are opening doors to operational cooperation. Critics say they have performed poorly and are wasting shareholder money.
Sports Direct’s stake in Goals was acquired at the end of 2015, when the shares were trading above 130p. They were 27p at the time of the suspension.
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