Watchdog to probe Sports Direct accounts over family ties

The Financial Reporting Council has launched an investigation into the accounts of Sports Direct International.

The financial reporting watchdog said it decided to open the investigation into the 52-week period ended 24 April following reports of an arrangement between Sports Direct and Barlin Delivery Limited, which was not disclosed as a related party in the company’s financial statements.

Barlin Delivery is owned by John Ashley, who is the older brother of Sports Direct founder Mike Ashley.

Earlier this month, the company – whose working practices came under scrutiny following an undercover Guardian investigation last year – was accused of spying on MPs during an unannounced visit to its Shirebrook warehouse.

MPs visiting the warehouse said that a recording device had been planted in the room where they had gathered for private discussions, but Sports Direct later said it had not authorised or had any knowledge of a device.

The Guardian investigation found that Sports Direct workers were being paid less than the legal minimum wage and a report by the business, innovation and skills select committee in July found the company was using “appalling working practices”, treating its workers “as commodities rather than human beings”.

The committee’s chairman, Ian Wright, said at the time: “Whistleblowers, parts of the media and a trade union shone a light on work practices at Sports Direct, and what they revealed was extremely disturbing. The evidence we heard points to a business whose working practices are closer to that of a Victorian workhouse than that of a modern, reputable high street retailer.”

At 1300 GMT, the shares were down 2% to 296.40p.