Mike Ashley’s choice for Findel board tainted by role in USC collapse

Retailer part-owned by Sports Direct urges shareholders to block the appointment, writes Simon Neville

Mike Ashley wants to see Benjamin Gardener, who was named at a hearing into the collapse of USC, join Findel’s board (Getty)

The man Sports Direct wants to appoint to the board of rival retailer Findel was one of the key people responsible for USC when it was put into a pre-pack administration and subsequently bought back by Sports Direct debt-free.

Benjamin Gardener, with his boss Justin Barnes, ignored advice from the administrators, Duff & Phelps, to inform staff at a Scottish warehouse that they could lose their jobs, it was claimed.

USC’s lack of consultation during the administration is now the subject of criminal charges brought against Sports Direct’s chief executive, Dave Forsey, who is accused of failing to inform the Business Secretary in advance. As a result he could be left with a criminal record and £5,000 fine. He denies the charge.

Mr Forsey could also be banned as a company director following the conclusion of another investigation into the company’s conduct, leading to concerns that Mr Gardener might be an unsuitable candidate for Findel’s board.

Sports Direct, controlled by its controversial founder Mike Ashley, wants to see him join the board after it bought a 19 per cent stake in Findel last month. It had wanted to buy Findel’s Kitbag business, which is a website selling sporting goods such as replica football shirts. But Findel has urged its shareholders to vote against the appointment at an extraordinary general meeting called for 21 December; it has told Mr Ashley to buy the company outright if he wants to control it.

Investors Toscafund, Schroders and River & Mercantile – with a combined 43.9 per cent stake – have all agreed to vote against the appointment, and today’s revelation of Mr Gardener’s involvement could be another blow to Sports Direct’s ambitions.

The businessman, who is listed as running a subsidiary brand of Sports Direct called Gul, was named by Duff & Phelps at a select committee hearing into the collapse of the fashion chain USC earlier in the year.

MPs on the Scottish Affairs Select Committee were told by Philip Duffy that he had held meetings with Mr Gardener and his boss Mr Barnes at which he recommended that staff should be informed sooner rather than later.

He said: “We arranged a meeting with the company on the morning of the 9th [of January 2015]. That morning, we offered to give them [Mr Gardener and Mr Barnes] draft letters of consultation, saying, ‘You should be giving these to your employees.’

“We said, ‘We can prepare draft letters.’ We weren’t advising them. We said, ‘We think that you should do a consultation. Here are some standard letters that we would use in insolvency situations.’”

Four days later about 200 staff lost their jobs and were given only 15 minutes’ notice, despite Mr Gardener and Mr Barnes having allegedly received draft letters in advance.

Their apparent failure to act is likely to be used as evidence in Mr Forsey’s forthcoming trial, which is due to be heard at Chesterfield Magistrates Court next year. Mr Forsey pleaded not guilty at a preliminary hearing earlier this year.

Mr Gardener’s involvement in USC’s administration, which led to MPs describing Sports Direct as being run like a “back street outfit” with suppliers being “held to ransom”, could call into question his suitability to take on a non-executive role, especially with the court case looming.

Before working for Sports Direct Mr Gardener had been a marketing manager for Manchester United; he had also worked for Unicef’s licensing department. He had also been a director of the Berkshire-based Elite Brands Wholesale, which was incorporated in 2010 and dissolved in August 2013.

Findel said it remained opposed to Sports Direct’s plans, claiming that the appointment created conflicts of interest. It did not comment on Mr Gardener’s past with USC.

Sports Direct had previously said Mr Gardener “would be a tremendous addition to a board that has consistently under-delivered for its shareholders”. Last night it decline to comment.

We said, ‘You should consult on redundancy [with USC staff]. Here are some standard letters’