British newspapers have extensively reported about a hearing started in the High Court in London last week, which portrayed the majority shareholder of Sports Direct International (SDI), Mike Ashley, as an astute businessman prone to binge drinking and getting bored during meetings with investment bankers.
The hearing revolves around a claim by Jeff Blue, a former investment banker at Merrill Lynch who spent nearly two and a half years at SDI as strategic development director, up to March 2015. Blue claims he is owed £14 million out of £15 million (€17m-$19m) allegedly promised to him by Ashley in 2013 at a pub meeting with investment bankers from Espirito Santo, a Portuguese bank, in case he managed to roughly double the Sports Direct share price to £8. Ashley has described the claim as ludicrous, saying that the group at The Horse & Groom pub in Fitzrovia that evening had engaged in “banter” and that none of the participants could have taken the discussion seriously. The alleged target was met in February 2014 and Blue received £1 million in May that year, which Ashley claims was unrelated.
“Crap,” “bullshit” and “liar” were some of the words reportedly heard in the court as Ashley vividly dismissed the claims by Blue around the alleged promise at the pub meeting – as well as broader claims that Ashley made it a habit to take multi-million pound business decisions while drinking in pubs.
In this context, the court reportedly heard claims that some pub meetings involved substantial drinking and that they amounted to “pub lock-ins” with fish and chips or kebabs provided throughout the evening. Blue told the judges that one such gathering included a drinking contest in which Ashley vomited into the fireplace.
About the night at the Horse & Groom, Ashley was reported as saying in substance that he engaged in banter about various items including Newcastle United and the SDI share price. He had no clear recollection of the talk but, under the circumstances, he claimed it was nonsense to regard exchanges on a multi-million bonus as a binding agreement.
Ashley was quoted as saying that he enjoyed getting drunk, describing himself as a “power drinker.” But he rejected claims that he was often taking important business decisions while drinking, saying he would normally consume four pints before moving on to wine with dinner. Sports Direct's founder took the opportunity to express his dislike of meeting with investment bankers, saying that he would rather have put needles in his eye.
Ashley angrily dismissed further allegations by Blue that he personally paid up to £1 million (€1.1m-$1.3m) per year to Dave Forsey, Sports Direct's long-time chief executive – on top of his relatively low reported pay of £150,000 (€169,000-$193,000) and supposedly to avoid having to raise the salaries of other staff.
Peter Cowgill was drawn into the court case because Blue reportedly said he had heard about the alleged payments by Ashley in a talk with JD Sports Fashion's chief executive. As reported by The Guardian, Cowgill told the High Court on Thursday that he had no knowledge of the senior management's pay at Sports Direct.
