Share purchase own goal at Mike Ashley’s Frasers Group
Written by Hit Music Radio News on 18/08/2020
The company behind Mike Ashley’s retail empire including Sports Direct has revealed a breach of City rules through a director’s purchase of stock.
Frasers Group said its non-executive chairman David Daly bought 3,912 ordinary shares in the company “in error” on Monday.
It explained the gaffe by saying the purchase took place during a so-called closed period, in the run-up to the release of its annual results this Thursday.
The rules under a closed period are ultimately aimed at preventing an individual potentially profiting from any inside information.
Frasers said: “The issue was rectified as soon as it came to the company’s attention and the shares were sold within 15 minutes of their purchase.
“A small profit was made on the sale which David Daly has donated to charity.”
The company added that “robust procedures” it had in place “were accidentally not followed in this instance”.
The blunder will only add to concerns expressed in recent years by investors relating to corporate governance practices at the company.
They first surfaced meaningfully in 2016 amid a bruising for Mr Ashley and-then chairman Keith Hellawell over controversial working practices at Sports Direct.
But the retail tycoon has still managed to face down several shareholder revolts since thanks to his dominant voting rights as a majority shareholder of the company.
Mr Daly’s responsibilities at Frasers also include setting the company’s corporate pay policy.
He joined Frasers Group in 2017 following a 30-year career at Nike.
Mr Daly is also a non-executive director at Fulham Football Club – recently promoted to the Premier League.
The team will compete against Newcastle United, which Mr Ashley owns personally and is still trying to offload following a failed sale to a Saudi-led consortium, in the looming season.
Thursday’s annual results are eagerly awaited as they will give the first insight from the company since March on trading during the coronavirus crisis that has hammered retailers heavily exposed to the high street during the damaging lockdown.
It is the second time in as many years that its full-year figures have been delayed.
Having blamed last year’s wait on the complexities of integrating its House of Fraser acquisition, the company said a week ago that it needed more time to complete accounting disclosures.
The results statement may also offer more insight on Mr Ashley’s expansion plans.
Having bought House of Fraser out of administration two years ago – an investment that has proved a financial drag – there is speculation he may revive his interest in struggling Debenhams despite an earlier holding being wiped out.
Sky News revealed last weekend that the chain had drafted in experts to work on a possible liquidation of the business.
Mr Ashley’s other investments under the Frasers banner have included building a stake in Hugo Boss and the purchase of Evans Cycles.
He has also, this week, submitted a bid for the collapsed sports retailer DW Sports.
Shares, almost 40% down in the year to date, closed 2% lower on Tuesday.
© Sky News 2020