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Sports Direct to be investigated by Britain's financial reporting watchdog

Photo: PA

Mike Ashley's Sports Direct is to be investigated by Britain's financial reporting watchdog over the retailer's relationship to a firm owned by the retail tycoon's brother.

The Financial Reporting Council has announced it has launched a probe after it emerged in August that Sports Direct's accounts fail to disclose that international deliveries are run by Mr Ashley's brother, John.

It's thought Sports Direct pays Barlin Delivery - run by the founder's older brother - a share of the revenues generated by orders that are dispatched overseas. The organisation said:

"The Financial Reporting Council (FRC) has commenced, these decisions follow reports of an arrangement between Sports Direct and Barlin Delivery Limited which was not disclosed as a related party in the company's financial statements."

– Financial Reporting Council
Mike Ashley owns Sports Direct Credit: PA

Mr Ashley has come under intense pressure from shareholders over corporate governance over the past six months and the Newcastle United owner received a dressing down by furious MPs over the summer.

The billionaire was grilled over working conditions at the company's Shirebrook factory, where it emerged staff were not paid the national minimum wage.