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Sports Direct is paying the brother of billionaire founder Mike Ashley to do deliveries
Joe Giddens / PA Wire/Press Association Images
A company owned by the brother of Sports Direct founder Mike Ashley is making an estimated £300,000 ($391,557) handling international deliveries for the discount sports retailer, according to the Financial Times.
The paper found that Barlin Delivery, a delivery broker that processes international orders for Sports Direct's 33 overseas operations, is owned by John Ashley, brother of Mike. Around 6% of Sports Directs' £2.9 billion in revenue comes from overseas orders and Barlin makes an estimated £300,000 a year, according to the FT.
Further investigation by Business Insider also suggests Barlin is working with other bands owned by Mike Ashley, including USC, Karrimor, and the online shop of football club Rangers.
Barlin's headquarters are registered at a detached house in a Cleethorpes cul-de-sac, a small seaside resort on the Humber estuary in Lincolnshire, and the company does not own any trucks or employ any drivers, instead working as an intermediary that arranges delivery for Sports Direct.
The business relationship has to date not yet been disclosed despite usual rules requiring directors to detail engagements with "related parties." Sports Direct t0ld the FT its auditors Grant Thornton decided no disclosure was necessary.
Barlin was only formed in February 2015 and has yet to file accounts. In May it was served with a compulsory wind-up order by Companies House, the UK companies regulator. These orders can be made for a variety of reasons, such as the company being dormant or accounts being overdue. The compulsory strike-off order was withdrawn in late June.
Sports Direct was unavailable for comment at the time of writing but the company told the FT:
"This structure is intended to enhance, not divert, Sports Direct’s revenues — and we believe it has that effect. From our perspective [Barlin] delivers valuable arms-length services."
It is not the first time business relationships between Sports Direct and Mike Ashley's immediate family have been uncovered. Last year it was revealed that the discount sports goods retailer gave the boyfriend of owner Mike Ashley's daughter a high-level job and a £10.7 million loan.
The FT also reports that John Ashley, Mike's older brother, ran Sports Direct's computer systems from the 1980s until 2 years ago when he resigned his directorship.
Sports Direct has been under serious political and business pressure, with its working practices under scrutiny and performance slipping.
The retailer agreed to pay £1 million to former staff recently after admitting it had effectively paid warehouse workers less than minimum wage. That admission came after a series of press investigations and a Parliamentary inquiry that concluded conditions at Sports Direct's warehouses were like a "Victorian workhouse."
Sports Direct's share price has collapsed almost 50% since the start of the year, due to the political pressure and struggling business performance.
Joe Giddens / PA Wire/Press Association Images
You can read the full FT story here.
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