* Independent shareholders oppose Hellawell again
* Embattled chairman needs Ashley's support to stay on
* Ashley says Hellawell has his "full backing"
(Adds result, Ashley quote, investor reaction)
By Paul Sandle
LONDON, Jan 5 Sports Direct's embattled
chairman Keith Hellawell was re-elected on Thursday after
company founder Mike Ashley backed him, ensuring he would stay
in the role despite being opposed by a majority of the
retailer's independent shareholders.
Investors have blamed Hellawell for a string of management
and governance failures at the sportswear group, and he only
kept his job at the annual meeting in September with the help of
Ashley's majority control.
"Keith has my full backing and will be continuing in his
role on the basis that he has the unanimous support of the
board," Ashley said after a second vote on Thursday at a special
meeting called by the company in Derbyshire.
"I note that many of those who voted against Keith have
acknowledged that we have made positive progress since the AGM."
Hellawell faced another ballot under new rules designed to
give shareholders a bigger say, but his re-election was a
foregone conclusion because he had the support of Ashley, who
owns 55 percent of the group.
However, the 54 percent of the independent votes cast
opposing him was unchanged from September, indicating that
investors have not been persuaded by his pledge to drive
improvement at the company.
Shareholder Aberdeen Asset Management said it was no
surprise that Hellawell, a 74-year-old former police chief
constable and government drugs czar, had been re-elected given
Paul Lee, the investor's head of corporate governance, said
the real test would come at the next annual shareholder meeting
later this year when Hellawell has pledged to step down if he
again fails to win the backing of independent investors.
He said progress was needed on a genuinely independent
review of working practices and governance, the group needed to
deliver on its undertakings to its workforce, and it needed to
enhance its reporting.
"Most importantly, we need to see progress towards
appointing a new executive team with the necessary skill set and
experience to manage a company of Sports Direct's size and
scale," he said.
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.
The Unite trade union said in August that thousands of
workers at Sports Direct's main warehouse were set to receive
back pay totalling about 1 million pounds ($1.3 million) after
their wages fell short of the legal minimum.
Investors, 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 shares, which have halved in price over the last year,
traded 2.5 percent higher at 1418 GMT.
(Editing by Mark Potter and Adrian Croft)