Sports Direct facing probe from financial regulators

Sports Direct is facing scrutiny from two financial regulators over its accounts and information relating to a possible bid for Debenhams.

According to The Times, the Financial Conduct Authority (FCA) is looking into the retailer regarding the disclosure of information in relation to its bid for the department store.

Questions were raised by the FCA after Sports Direct was forced to issue a statement in September in which the retailer denied having any intention of making a takeover bid for Debenhams. However, just  a few months, later a series of offers were made to the department store all of which had the condition of making Mike Ashley the CEO of Debenhams and getting rid of its current board members.

The Financial Reporting Council (FRC) is also looking into the company’s auditor, Grant Thornton, over concerns of how Sports Direct’s stake in Debenhams was valued.

The FRC is looking into whether Sports Direct’s 29% stake in Debenhams should have been valued higher thus giving it more influence over the department store.

FCA refused to comment and FRC has been contacted.