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Sports Direct CEO charged over lay offs at group company

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LONDON, Oct (HKSE: 3366-OL.HK - news) 9 (Reuters) - The chief executive of British sportswear retailer Sports Direct International (Other OTC: SDIPF - news) has been charged in criminal proceedings related to the sacking of workers at a warehouse belonging to a group company.

"We can confirm that criminal proceedings have been commenced against David Michael Forsey," Britain's Insolvency Service said on Friday.

Forsey was the sole director of West Coast Capital, a Sports Direct controlled company that owned the warehouse in Scotland, as well 28 stores of Sports Direct's USC fashion chain. West Coast Capital collapsed in January.

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"He is charged with an offence contrary to section 194 of the Trade Union and Labour Relations (Consolidation) Act (Frankfurt: 0LW.F - news) 1992," the Insolvency Service said in a statement.

Sports Direct declined to comment.

After West Coast went bankrupt in January, its USC stores were bought out of administration by another Sports Direct company, but about 50 staff at the warehouse in Ayrshire, Scotland were dismissed with only 15 minutes' notice.

Under British employment law, the dismissal of between 20 and 99 people requires a consultation of at least 30 days, and failure to give workers this notice period is an offence that carries a maximum fine of 5,000 pounds ($7,655.50).

The case will be heard at Chesterfield Magistrates Court on Oct. 14, the Insolvency Service said.

Shares (Berlin: DI6.BE - news) in Sports Direct, already down 3 percent on Friday after a Morgan Stanley (Xetra: 885836 - news) downgrade of the stock, extended losses after the news that Forsey had been charged and closed down 6.6 percent.

The workers were awarded compensation equivalent to 90 days' pay - paid by the state - at a tribunal in Glasgow on Friday.

Sport Direct had already faced questions over its treatment of the warehouse staff.

Mike Ashley, founder of Sport Direct and the owner of Newcastle United soccer club, was called to appear before a British parliamentary committee earlier this year, but instead sent the company's chairman Keith Hellawell.

The chairman of the Scottish Affairs Committee said Sports Direct had "shafted" taxpayers, suppliers and workers in putting the company into administration, according to media reports.

($1 = 0.6531 pounds) (Reporting by Paul Sandle; Editing by Keith Weir and Susan Fenton)