By guest author Sahar Nazir from Retail Gazette
- Sports Direct’s auditor Grant Thornton will resign following concerns over a £605 million tax bill
- The US accounting firm will step down in September after Sports Direct’s AGM
- Grant Thornton has audited Sports Direct since 2007
Sports Direct’s auditor Grant Thornton it set to resign following concerns over a EUR 674 million (GBP 605 million) Belgian tax bill, in a move that would put Mike Ashley’s retail empire under more pressure.
The US accounting firm is due to step down in September after the retailer’s AGM takes place.
Grant Thornton has audited Sports Direct since 2007, when it first floated on the London Stock Exchange.
Sports Direct reportedly informed Grant Thornton – one of its largest listed audit clients – of the tax liability just hours before it was due to sign off on its annual accounts late last week, according to two sources.
The retailer could now struggle to find an auditor amid fears its full-year results would not persuade rival accounting firms to tender for its audit contract.
Sports Direct was forced to delay the posting of its earnings by 10 hours, and confirmed that this was due to a EUR 674 million (GBP 605 million) Belgian tax bill.
Meanwhile, Sports Direct’s finance director Jon Kempster also announced he was quitting on Friday when the business revealed its full-year results.
Sports Direct’s head of retail Karen Byers and company secretary Cameron Olsen also resigned in recent weeks.
Chris Wootton, who is due to replace Kempster, said Sports Direct considered the tax demand “without merit” and plans to contest it.
If Sports Direct cannot find an auditor, City rules stipulates that this would give the Department for Business the right to make an appointment for them.