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Sports Direct ordered to hand over financial documents

A judge has ordered Sports Direct to hand over documents to the Financial Reporting Council (FRC) as part of an investigation into its 2016 results.

The FRC probe is investigating the conduct of Sports Direct auditor Grant Thornton, after the audit of the 2016 financial results failed to disclose that Sports Direct had hired Barlin Delivery, a company owned by Mike Ashley’s brother. An employee accounting oversight is also being investigated.

The FRC accused Sports Direct’s of “obfuscation and delay verging on obstruction”, for its refusal to hand over the documents, and a High Court judge ordered that the 40 contested documents must be handed over.

In a statement, Sports Direct raised its intention to appeal the ruling, and highlighted that the company itself was not under investigation, with the FRC looking into the conduct of Grant Thornton.

“The company would like to clarify that Sports Direct itself is not the subject of an investigation by the FRC, which has jurisdiction over accounting firms and accounting professionals,” commented a spokesman.

“Sports Direct is a witness in an FRC investigation, details of which were made public by the FRC on 28 November 2016. This court application relates to the FRC’s requests for the provision of certain documents.”

Ahead of the company’s AGM on 12 September, Sports Direct also released a statement confirming that it is trading in line with expectations, and expects EBITDA for the year to rise by between 5% and 15%, excluding the acquisition of House of Fraser.

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