Frasers prevents regulator from publishing key findings

Mike Ashley’s Frasers Group refused to let the Financial Reporting Council publish the main findings of an investigation into the retailer’s most recent annual report.

Frasers has been involved in corporate governance disputes for many years. The company has refused to give the regulator consent to release a case summary after “substantive investigations” were conducted with it.

Frasers is refusing to make the Frasers annual report public for the second consecutive year.

Since the regulator implemented a more transparent regime for corporate reporting reviews after the Sir John Kingman independent review in 2018, there are only 14 cases or 4 percent of the total. Three of these cases concern Frasers, or a company in the group.

The regime was implemented when Sir Jon Thompson, the chief executive officer of the regulator, was in charge. Thompson, 59 years old, a former Chief Executive of HM Revenue & Customs is set to join Frasers board as a Non-Executive Director this year.

Frasers is now the only FTSE 100 Company to withhold consent.

Although the issues raised by FRC in its review are not known, it is understood that they do not relate to auditing issues.

The FRC fined Grant Thornton in July 2022 for “serious failures” it made in its auditing Sports Direct (now called Frasers) in the financial years 2015-16 and 2017-18. Grant Thornton resigned in 2019 as auditor after the company’s financial results were delayed due to the handling of a €674m Belgian tax bill.

RSM audited only Grant Thornton at the time. The retailer had struggled to find a new auditor.

Frasers is a retail company based in Shirebrook near Mansfield in Derbyshire. The majority shareholder, Ashley (59), controls the business. Ashley, who started his retail empire in 1982 with a shop in Maidenhead, agreed to a consulting agreement with Frasers in October 2022. Michael Murray, Ashley’s son-in law, was appointed chief executive of Frasers in May.

The group generated profits of £660.7 on revenues of nearly £5.6 billion for the year ending April 30, 2023. It owns House of Fraser, Flannels, and Sports Direct.

Frasers spokeswoman said that the business had already answered any questions raised by FRC. The FRC is known to ask many questions about accounts.