LONDON Jan 5 Sports Direct investors
will vote on the re-election of chairman Keith Hellawell later
on Thursday, four months after he was rejected by a majority of
independent shareholders who said he had overseen a string of
management and governance failures.
Hellawell is likely to win the ballot at a special meeting
because he has the support of founder and chief executive Mike
Ashley, who owns 55 percent of the sportswear retailer.
However, the 74-year-old former police chief constable and
government drugs czar pledged in September he would step down at
the next annual shareholder meeting later this year if he once
again did not receive the backing of independent investors.
Aberdeen Investment Management plans to vote against
Hellawell on Thursday, saying that although the company had made
progress since the last meeting, it was still "deeply concerned"
Hellawell said in September he had offered to resign, but
the board had persuaded him to stay to oversee improvements in
working practices and independent scrutiny.
Sports Direct was condemned by lawmakers last year for its
treatment of workers, including paying some less than the
minimum wage for shifts at its warehouse in central England.
An independent report commissioned by the company found
"serious shortcomings" in working practices, which it is taking
steps to tackle.
Investors, already counting the cost of the damage to the
company's reputation, have also endured a slump in profits at
the sportswear retailer, in part caused by Britain's vote to
leave the European Union, which has pushed up its costs. The
stock has halved over the last six months.
Shareholder advisory group ISS is also opposed to
Hellawell's re-appointment in the second ballot, called under
new rules that give independent shareholders more say.
"As chairman, Keith Hellawell has overseen a period of
serious operational, governance, and risk oversight concerns
which have materially affected the company's outlook and damaged
shareholder value," it said.
(Reporting by Paul Sandle; Editing by Mark Potter)