MPs say Ashley to blame for Sports Direct's 'appalling' practices

LONDON MPs said on Friday that Mike Ashley, founder and majority shareholder of Sports Direct, must be held accountable for what they called "appalling" working conditions and practices at the retailer's shops and warehouse.

Publishing its report on the sporting goods retailer, the cross-party parliamentary Business, Innovation and Skills (BIS) committee said the evidence gathered during their inquiry was extremely disturbing.

It said Sports Direct treated its workers "as commodities rather than human beings."

"The evidence we heard points to a business whose working practices are closer to that of a Victorian workhouse than that of a modern, reputable high street retailer," said Iain Wright, the Labour lawmaker who chairs the BIS committee.

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"For this to occur in the UK in 2016 is a serious indictment of the management at Sports Direct and Mike Ashley, as the face of Sports Direct, must be held accountable for these failings."

Ashley, 51, the deputy executive chairman who owns 55 percent of Sports Direct's equity, appeared before the lawmakers last month.

He admitted that some workers at Sports Direct's Shirebrook warehouse in Derbyshire, central England, had effectively been paid below the national minimum wage and that the firm had got too big for him to control. He pledged to improve working conditions.

A spokesman for Sports Direct said the company would study the parliamentary committee's report very carefully. "It is our policy to treat all our people with dignity and respect," he said.

"We are pleased to see that the committee has recognised Mike Ashley's commitment to engage in addressing any shortcomings in the working practices at Sports Direct," the spokesman said in an emailed comment on the report.

The retailer is now being investigated by Her Majesty's Revenue and Customs, Britain's tax and wages authority. It could fine Sports Direct and demand back pay for workers.

Sports Direct, a mainstay of Britain's shopping streets offering low-priced sports goods through 450 stores, has had a torrid year so far, issuing three profit warnings.

Its shares have slumped 54 percent, and it has lost its place in Britain's FTSE 100 index of leading shares.

The parliamentary committee heard a series of accounts of worker mistreatment at Shirebrook, where Sports Direct uses thousands of agency staff, including workers being penalised for breaks to drink water and for taking time off work when sick.

Allegations were also made of some workers being promised permanent contracts in exchange for sexual favours.

Other evidence given to lawmakers pointed to serious health and safety breaches, with repeated ambulance calls to the warehouse including in one case for a woman who gave birth in the toilet.

Wright said the evidence suggested either Ashley turned a blind eye to conditions so as to maximise profits or there are serious corporate governance failings which left him out of the loop.

The committee plans to visit Shirebrook and will "hold Mr Ashley's feet to the fire," checking on the progress he makes to improve working conditions. The committee however has no powers to impose penalties.