Billionaire Ashley’s treatment of staff is under increasing scrutiny

Questionable working practices within Sports Direct International have caused a public outcry

Mike Ashley (left, with Joe Kinnear) own Newcastle United Football Club as well as Sports Direct International. Photograph: Stu Forster/Getty Images

Mike Ashley, the billionaire founder of Britain's biggest sporting goods retailer, is a man who's used to getting his own way.

But things haven't been going too well recently for the combative boss of Sports Direct International. Questionable working practices within his retail empire, revealed by a Guardian investigation, have caused a public outcry and shares in the group have slumped amid growing concerns over its corporate governance.

Ashley, who also owns Newcastle United football club, suffered another blow this week, failing in his attempt to install a representative on to the board of online retailer Findel. Sports Direct has built a near-20 per cent stake in Findel, which owns the Kitbag replica football shirts and sports merchandise business – a direct competitor to Sports Direct.

Findel shareholders were unimpressed by Ashley's assertions that their company would benefit from the expertise of Ben Gardener, a former executive at Sports Direct, and voted overwhelmingly against his appointment. Chorus of criticism Ashley is not the kind of man to accept defeat quietly. So rather than keeping a low profile, given the mounting chorus of criticism currently being directed his way, he laid into the company for its poor financial performance and lacklustre share price.

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Ashley’s choice of Gardener as his representative was particularly controversial, as he was involved with the Sports Direct subsidiary USC, which collapsed into administration in January.

Sports Direct's chief executive, David Forsey, is facing criminal charges over the handling of redundancies at the business, where 200 warehouse staff were given just 15 minutes' notice that they were losing their jobs.

Ashley’s treatment of workers within his retail empire has been under scrutiny for some time. In October, a BBC investigation found that ambulances or paramedic cars had been called to Sport’s Direct’s headquarters in Shirebrook, Derbyshire, 76 times in two years, with many of the calls for “life-threatening” illnesses.

The Guardian investigation earlier this month detailed how temporary workers at the group's huge Shirebrook warehouse – known locally as "the gulag" – were subjected to a regime of searches and surveillance. The time taken to search staff at the end of their shifts meant thousands were effectively receiving rates of pay below the minimum wage.

Staff would be severely penalised for turning up even a few minutes late and were harangued over the tannoy for not working fast enough during shifts in which they walk almost 20 miles picking products from the warehouse shelves.

The revelations caused an outcry, with MPs, City shareholders and unions lining up to demand action. Branding Sports Direct "a scar on British business", Simon Walker of the Institute of Directors said: "IoD members share the public's outrage." MPs also lined up to voice their criticisms in an urgent parliamentary debate at Westminster.

Investors have been speaking out too, with hedge fund boss Crispin Odey describing the controversial Ashley, who controls 55 per cent of Sports Direct, as "difficult to house-train".

Other shareholders warned that until the group addressed the growing concerns over corporate governance and the treatment of its workers, its shares would remain at risk. Investigation Ashley’s response to the furore has been to announce an investigation into working practices at the group – a review he will head personally.

Chuka Umunna, the former shadow business secretary, said that putting the Ashley in charge of the review “has the whiff of a pupil marking their own homework”. An investigation into workers’ rights was long overdue, he said, but should be conducted by an independent third party.

Ashley will start to mark his own homework in the new year, when the review begins, but will have further calls on his time from Westminster.

The business, innovation and skills select committee has said it will call him for questioning by MPs on working practices at the group. It’s not the first time Ashley has been summoned before MPs: in March he was asked to appear before the Scottish affairs select committee over the treatment of workers at USC.

Ashley declined the invitation, however, instead sending his chairman, Keith Hellawell, who was unable to answer many of the questions put to him and, according to one MP on the committee, appeared to have an almost total lack of knowledge on exactly how the company was run.

The billionaire retailer may find his latest invitation more difficult to decline, however. The business committee, which sees his appearance as a test of Parliament's authority, is considering summoning the Sports Direct boss officially. Even for Ashley, that would be a difficult one to dodge. Fiona Walsh is business editor of theguardian.com