Mike Ashley fails in court bid to trigger investigation into struggling Debenhams

May 27, 2020

Businessman and Newcastle United owner Mike Ashley has failed in a bid to trigger an investigation into the financial affairs of struggling department store chain Debenhams.

Lawyers representing Mr Ashley's Frasers Group, which owns nearly a third of Debenhams' shares, asked a judge to appoint a "provisional liquidator" to begin inquiries.

But Judge Mark Mullen, who considered the application at a remote hearing in the specialist Insolvency and Companies Court on Wednesday, refused.

The judge said neither other Debenhams' shareholders nor creditors were aware of the application.

He indicated that he would reconsider the issue at another hearing in the near future, but said he wanted the application to be "known about".

Debenhams has been in administration since April, for the second time in about 12 months.

Judge Mullen said Frasers Group had issued a winding up petition.

No decision has been made about whether that winding up petition should be granted.

The judge said the appointment of any "provisional liquidator" was not urgent as there was no evidence to suggest that Debenhams' assets or documents needed to be secured because they were in any danger.

A barrister representing Frasers Group had argued that a provisional liquidator should be appointed.

Barry Isaacs QC told the judge how Debenhams had last year borrowed around £40m - but Frasers Group loan offers had been rebuffed.

The judge said Frasers Group had identified those "bridging facilities" as "suspicious".

Frasers Group was known as Sports Direct International and bosses announced a re-brand late in 2019.

In late March, Mr Ashley found himself apologising for a series of mistakes in his company's handling of the coronavirus outbreak.

He was roundly criticised by MPs for emails to the government, as the country was placed on lockdown, in which the company claimed Sports Direct was essential for keeping the nation active.

It later moved to defend its stance in further correspondence before backing down and closing stores.

Mr Ashley published an open letter expressing regrets, but also offered use of the company's truck fleet to the NHS for the delivery of supplies to fight COVID-19.

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