Sports Direct's Ashley says firm paid staff below minimum wage

* Ashley faces lawmakers after four month standoff

* Faces questions over treatment of workers

* Says CEO Forsey won't take 4-year share bonus (Recasts with Ashley comments, union representatives' comments)

By James Davey and Paul Sandle

LONDON, June 7 (Reuters) - Mike Ashley, the billionaire founder of British retailer Sports Direct, said on Tuesday the company effectively paid warehouse staff below the statutory minimum wage by requiring them to queue for security checks on their own time.

After a four-month standoff over whether he would appear before lawmakers to answer criticisms of working practices at his firm's main warehouse, Ashley told a parliamentary committee he had conducted a review that had identified shortcomings.

The 51-year-old, who also owns Newcastle United soccer club, said these were now being addressed and that Sports Direct Chief Executive Dave Forsey would not be taking his four-year share bonus, worth up to 4 million pounds ($5.8 million).

"Some things have come as a bit of an unpleasant surprise," Ashley said of his review, conceding security bottlenecks at the warehouse in Shirebrook, central England, had led to workers effectively earning below the legal minimum for a short period.

"I have discovered some issues and hopefully I've addressed some of those issues."

Wearing a black suit and a tie in the colours of Newcastle United, Ashley said his review was a "work in progress" and would "never" be completed.

Ashley is deputy executive chairman of Sports Direct and holds 55 percent of the company's equity. He had for four months refused to appear before lawmakers, accusing them of creating a media circus, but changed his mind on Sunday.

Sports Direct, a mainstay of Britain's shopping streets offering low priced sports goods through 450 stores, has had a torrid year so far, issuing two profit warnings. Its shares have slumped 37 percent, and it has lost its place in Britain's FTSE 100 index of leading shares.

Luke Primarolo, regional officer of the Unite trade union, told lawmakers at the same session there was a "culture of fear" at Shirebrook, which employs over 3,000 agency workers.

"People are scared because they are working under a system that they know they could lose their employment at any moment," he said.

In a letter to Sports Direct's 27,000 staff late Monday, Ashley said he was appearing before lawmakers "to defend the good name of Sports Direct and all of yourselves", according to several media.

($1 = 0.6887 pounds) (Additional reporting by Sarah Young; Editing by Keith Weir and Mark Potter)