Sports Direct shareholders block £11m payout to Mike Ashley's brother

Mike Ashley had asked Sports Direct's shareholders to approve an £11m payout for his brother John

Sports Direct’s shareholders have voted to block an £11m payout to its founder Mike Ashley’s brother.

Mr Ashley, who controls a majority stake in the sportswear retailer but abstained from the vote, had asked the rest of its backers to approve the sum after a review found John Ashley was owed millions in unpaid incentives dating as far back as 2007.

But today they said no, with around 71pc voting against the proposal.

Sports Direct said: “The board trusts that shareholders will welcome the steps taken to reassure them that John Ashley did not benefit inappropriately from being the brother of majority shareholder Mike Ashley."

The company added: “In fact, John was actually disadvantaged by approximately £11m after he forewent bonuses that he would have received if he were treated equally to other executives who helped to build the company.”

Key shareholders including Royal London Asset Management had previously indicated they would not be backing the proposal.

The review by Sports Direct’s legal advisors RPC and accounting firm Smith & Williamson followed the revelation that Sports Direct had been paying John Ashley’s company, Barlin Delivery, a share of its overseas website sales.

But it found that the retailer’s former IT director had in fact been underpaid, missing out on £11m of bonuses and share awards “because of concerns at the time about public relations”.

As he called the vote last month, Mike Ashley said: "I fully expect that independent shareholders will vote against this proposal due to the passage of time involved, although in my opinion, technically the money is owed and therefore should be paid.

"It's important for me to say that if John had owed one pound to Sports Direct, I would have ensured any sum was repaid in full."

Two thirds of shareholders also voted against a proposal to extend a minimum payout of up to £4 per share for directors Karen Byers and Sean Nevitt via the company’s executive bonus share scheme.

Mike Ashley previously provoked criticism by putting his daughter's boyfriend Michael Murray in charge of its property estate.

Last week the Government revealed Sports Direct had been forced to hand a total of £167,036.24 to 383 workers after failing to pay them the minimum wage, while its staffing agencies Transline and Best Connection were also in the firing line.

Best Connection was found to have underpaid £469,273 to 2,558 workers and Transline failed to pay £310,302 to 1,421 workers.