Home news Sports Direct chairman Keith Hellawell faces investor revolt

Sports Direct chairman Keith Hellawell faces investor revolt

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Sports Direct chairman Keith Hellawell faces a rebellion from independent shareholders at the retailer’s annual general meeting.Investors will vote on Mr Hellawell’s re-election to the post.Paul Lee, head of corporate governance at Aberdeen Standard, who will vote against Mr Hellawell, said the result would be “very close”.His re-election has become “a lightning rod” for shareholders’ concerns about the business, Mr Lee told the BBC.Other investors, Hermes and Fidelity, have also indicated they will vote against Mr Hellawell.Two shareholder advisory groups, Pirc and the Institutional Shareholder Service, are recommended that shareholders oppose his re-election. Who is Keith Hellawell?Mr Lee said the chairman had “become a symbol of wider corporate governance concerns” at Sports Direct.The retailer has faced criticism for its treatment of workers and the influence of founder and chief executive Mike Ashley, who owns 61% of the company.Mr Hellawell, a former chief constable of West Yorkshire and government drugs tsar, survived a revolt by independent shareholders in January to remain in his post.Although almost 54% of independent shareholders voted against his re-appointment, Mr Hellawell was backed by Mr Ashley.Analysis: Vote ‘too close to call’

By Dominic O’Connell, Today Programme business presenterKeith Hellawell was voted out by independent shareholders at last year’s annual meeting – only to stage a Lazarus-like comeback at a later extraordinary general meeting, where Mike Ashley used his 61% stake in the company to make sure the chairman did not leave. The result of today’s vote is far from clear. While several institutions have made it known they will vote against Mr Hellawell, it is not clear they have enough votes to carry the day. Some other big holders have not made their intentions clear, while tracker funds – those that hold passive investments to track a stock market index – may not vote at all.Underlying today’s shenanigans is a broad dissatisfaction at the way Sports Direct is being run. Mr Ashley made it the dominant force in sports retailing by following a “pile-it-high, sell-it-cheap” approach. Some investors are uncomfortable with his new “Selfridges of sport” formula, which will entail a big spending programme. They are also uncomfortable with his frequent trading in the shares of other retailers – he owns or has held stakes in French Connection and Debenhams, for example. Sports Direct shares were up 3% in early trading on Wednesday .The firm said it remained “optimistic” about profits this year and confirmed it now owns 100% of designer clothes retailer Flannels.
Source: BBC