Sports Direct Refuses Chairman's Resignation Ahead Of AGM

It has emerged that Sports Direct turned down an offer by its chairman to quit amid a critical report on working practices at the company.

Hours before its AGM, Sports Direct said Keith Hellawell - perhaps best-known as a former government drugs' tsar and chief constable of West Yorkshire - had received the backing of the board to put things right.

His position was expected to come under pressure in a wider potential shareholder revolt against its founder, billionaire tycoon and Newcastle United owner Mike Ashley, in the wake of the report commissioned by the company which found "serious shortcomings" at its warehouse in Shirebrook, Derbyshire.

Sports Direct apologised and offered better working conditions.

But it is unclear whether its actions, and Mr Hellawell's apparent attempt to take responsibility, will be enough to appease disgruntled shareholders who have seen the share price slump by 60% over the last year.

It emerged at the shareholder meeting that Mr Hellawell would quit next year if he failed to win significant support from investors.

Some want to see a wider, independent review into the way the company is run.

Sports Direct said Mr Hellawell had "offered to step down over the weekend".

It also released a trading update ahead of the showdown shareholder meeting, which began at 11am.

It warned that underlying profits for the full year were now likely to come in up to £120m lower than previously forecast.

Sports Direct's response to criticisms includes giving directly-employed staff the option of a permanent contract instead of being on controversial zero-hours deals.

However agency workers who represent most of those at Shirebrook will miss out on this.

Sports Direct also said a "six strikes" disciplinary policy will be ditched and changes made to try to ensure there is no "culture of fear" at the warehouse.

Meanwhile, it will put a workers' representative on the board to try to ensure that all staff "are treated with dignity and respect".

Sports Direct has been under the spotlight for months after a newspaper investigation exposed conditions at Shirebrook, amid claims by MPs that it was being run like a "Victorian warehouse".

It emerged that some workers were effectively being paid less than the minimum wage because they were subjected to security checks outside the times when they were clocked in for work.

Investor (LSE: 0NC5.L - news) groups have questioned the amount of power wielded by founder Mr Ashley, who owns 55% of the group and is deputy executive chairman.