Sports Direct said on 13 August 2019 it received notice from Grant Thornton, “following a review of its client portfolio”, it intended not to seek reappointment as the company’s auditors and will cease to hold office as auditors with effect from 11 September 2019.
The news comes after the delayed publication of Sports Direct’s annual results last month due to an unannounced £605m tax demand from authorities in Belgium, with reports suggesting Grant Thornton was only notified on the morning of the day the results were to be announced.
Sports direct has revealed it is now in “early discussions” with ‘Big Four’ accoutnancy firms as it seeks to find a replacement, however reports suggest KPMG, Deloitte and EY have declined due to a conflict of interest including EY’s “close proximity to House of Fraser, while PWC had a “reluctance to engage based on our ownership structure”.
According to the Financial Times, Sports Direct has asked the UK government on how it might act if it indeed becomes the first major UK-listed business to fail to appoint an auditor.
A spokesperson for Grant Thortnon confirmed to Retail Sector it is to step down on the 11 September but declined to comment further.