Sports Direct is gearing up for another showdown with investors next week as top City advisory groups call for the head of besieged chairman Keith Hellawell.
Hellawell, who has presided over plunging profits at the firm, has said he will walk if he does not receive the support of the independent shareholders at this year’s annual general meeting (AGM).
Read more: Sports Direct profits fall 60 per cent
In reports sent to investors, seen by City A.M., advisory groups Pension and Investment Research Consultants (Pirc), Glass Lewis, and Institutional Shareholder Services (ISS) call on shareholders to oppose Hellawell’s re-election at the vote on 6 September.
Just 47 per cent of of independent shareholders supported Hellawell at Sports Direct’s AGM last year, but he was saved by chief executive and majority shareholder Mike Ashley.
ISS said its recommendation “recognises the ongoing operational, governance and risk oversight concerns”.
Pirc criticised Hellawell's ineffectiveness on a myriad of issues, including the £40m purchase of a company plane and the hiring of Ashley's daughter's boyfriend to head up Sports Direct's property team.
"Also, the board has consistently failed to address the employment practices issues raised by some shareholders and trade unions that have also been criticised by a parliamentary select committee report," Pirc said.
"It is important for the shareholders to be confident about the board's ability to represent their best interests and not those of the controlling shareholder. This is no longer the case with the existing chairman and an oppose vote is therefore recommended."
A spokesperson for Sports Direct said Hellawell had the full support of the directors.
The spokesperson said: “The board recommends that independent shareholders vote in favour of Keith’s re-election, as Mike Ashley and the other directors intend to do in respect of their own shareholdings.”