Raymond Doherty 30 Jul 2019 11:06am

Grant Thornton to quit as Sports Direct auditors

The mid-tier firm is set to drop audit client Sports Direct over a last minute tax bill disclosure, according to reports

Grant Thornton has informed the Financial Reporting Council (FRC) of its intention to quit as auditors of the Mike Ashley-owned sports chain after the business revealed a (€674m) £616m tax bill from Belgian authorities just hours before GT was due to sign off its accounts.

Grant Thornton will step down after Sports Direct’s AGM in September, the Financial Times has reported. Grant Thornton is not commentating on the issue.

It is a further blow to the reputation of Sports Direct, which has been mired in controversy for a number of years.

Earlier this month, the company blamed GT for being under increased scrutiny from the FRC for the delay in publishing its annual results.

It was reported last year that three of the Big Four firms turned down the opportunity to tender for Sports Direct’s contract because of concern over conflicts of interest or reputational risk issues.

Sports Direct is also facing difficulties in integrating House of Fraser into its business, telling shareholders that “the current uncertainty as to the future trading performance” of the high street stores had also contributed to the delay in announcing its results.

In December, Sports Direct was forced to issue a clarifying statement after Ashley stated that trading in November 2018 had been “unbelievably bad”.

The company explained that, excluding House of Fraser, Sports Direct would be within its anticipated growth range. When including it, it expected “to be behind last year’s result”.