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Proxy adviser recommends Sports Direct shareholders vote against directors

Proxy adviser recommends Sports Direct shareholders vote against directors
FILE PHOTO: Mike Ashley, founder and majority shareholder of sportwear retailer Sports Direct, arrives at the company's AGM, at the company's headquarters in Shirebrook, Britain, September 7, 2016. REUTERS/Darren Staples/File Photo   -   Copyright  Darren Staples(Reuters)
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By Kanishka Singh

(Reuters) – Proxy adviser Glass Lewis & Co has recommended that shareholders in British sportswear retailer Sports Direct International Plc <SPD.L> vote against some directors, including Chief Executive Mike Ashley and Chairman Keith Hellawell, at the company’s annual meeting on Sept. 12.

Glass Lewis cited “repeated poor governance practices” as the reason for recommending a vote against Ashley, who is also founder of the sportswear chain. Negative media stories on Ashley have damaged the company’s public image, it said.

Hellawell and two other directors – Simon Bentley and David Brayshaw – were accused by the proxy adviser of responding poorly to past concerns of shareholders.

The proxy adviser also accused the chairman of “poor gender diversity practices”. Sports Direct does not have a meaningful board diversity policy or measurable gender objectives, Glass Lewis told Reuters in an emailed statement.

Sports Direct, which currently does not have a single female board member, should aim for a target of 33 percent of female board representation by 2020, the proxy adviser recommended.

Glass Lewis commented on the purchase by Sports Direct of department store group House of Fraser, saying that shareholders should be concerned about any regulatory investigation.

Earlier this month, Ashley, who also owns English Premier League soccer club Newcastle United, snapped up the 169-year-old House of Fraser’s 58 UK stores, its brand and its stock for 90 million pounds ($114.78 million), hours after it collapsed into administration.

The British sportswear retailer’s reported pre-tax profit in 2017-18 fell 72.5 percent to 77.5 million pounds.

(Reporting by Kanishka Singh in Bengaluru; editing by Andrew Roche)

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