Billionaire Mike Ashley is not one to back away from a fight, but will he be brave – or bolshy – enough to take on the British parliament?
The combative boss of Sports Direct is being formally ordered to appear at Westminster on Tuesday June 7th, when MPs want to question him about working conditions at his Sports Direct group, Britain’s largest sporting goods retailer.
The summons from the Business, Innovations and Skills (Bis) committee follows revelations last year about onerous working conditions at Sports Direct’s huge warehouse in Shirebrook, Derbyshire – known locally as “the gulag”– and the continuing controversy over the company’s widespread use of zero-hours contracts.
The investigation, conducted by undercover reporters for the Guardian, revealed an extraordinary regime of searches and surveillance for thousands of employees at the warehouse. The lengthy searches effectively pushed hourly pay below the minimum wage.
Hostilities between the billionaire and the Bis committee erupted last week, when he accused MPs of whipping up a media circus by ordering him to Westminster.
In a brief but strongly-worded letter to Bis committee chairman Iain Wright, Ashley accused MPs of abusing Parliamentary procedure, and said he was "disgusted" by their "deliberately antagonistic" stance.
Contempt of Parliament He berated the committee for turning down his offer to meet at the company’s Shirebrook headquarters, where he said they would gain “a detailed and balanced understanding of the matters you wish to discuss”.
But Wright is determined to get his man. Should Ashley persist in his refusal to appear, he could well be charged with contempt of Parliament, something that has not been seen for more than half a century. There was no public reaction from Ashley yesterday, other than a statement from a company spokesman expressing disappointment that MPs had declined the invitation to visit the group’s headquarters and that there would be a response “in due course”. But the escalation of the row comes at a difficult time for Ashley.
Last year's revelations about working practices have severely damaged Sports Direct's already poor reputation for corporate governance and further strained its relations with the City of London, putting its shares under pressure.
At the start of this month the group, founded by Ashley and in which he retains a 55 per cent stake, was relegated from the prestigious FTSE 100 index after £1.6 billion was wiped from its stock market value in just three months. At the time, TUC general secretary Frances O'Grady said it was "a cautionary tale for companies who treat their workers badly".
Ashely's Newcastle United football club is also battling relegation from the Premier League and some MPs have expressed a desire to question him about his handling of the club as well as Sports Direct.
This is not the first time a company executive has been formally ordered to appear before MPs. In 2011, Rupert Murdoch and his son James were summoned to appear before the Commons Culture Select Committee to be grilled on the phone-hacking scandal – at that hearing Murdoch senior was attacked by a protestor with a shaving-cream pie.
Order to appear Both Murdochs had originally said they were unable to attend the session and the order to appear was delivered to them in person at News International’s Wapping headquarters by the deputy Serjeant at Arms of the House of Commons.
The role of the Serjeant at Arms dates back to 1415 and the reign of Henry V and includes ceremonial duties. He and his team are also responsible for security at the House of Commons, and for carrying out the will of the Speaker.
Quite what sort of reception a House of Commons messenger might get at Shirebrook can only be imagined. Fiona Walsh is business editor of theguardian.com
