Sports Direct under investigation by accounting watchdog

Sports Direct owner and boss Mike Ashley faces fresh scrutiny as the Financial Reporting Council (FRC) officially launched an investigation into the sporting goods retailer.

The FRC said it would examine the preparation, approval and audit of the firm’s financial statements after the emergence of an arrangement between it and Barlin Delivery, a company owned by Ashley’s brother John.

Sports Direct’s website states Barlin provides overseas deliveries, using DHL to do so.

The FRC said the arrangement was not disclosed in the company’s accounts. Sports Direct did not comment but has previously said its auditors, Grant Thornton believed no disclosure was required.

The retailer has been criticised over its “Victorian” working practices and poor corporate governance.

It was also accused by MPs of trying to spy on their private discussions during a visit to the company’s Derbyshire headquarters. The Sports Direct board has said it was unaware of an attempt to record the conversations and Ashley has hit back at the MPs, saying Sports Direct staff "have been made a political football" by both them and trade unions.