Frasers Group settles £588m Belgian tax dispute
Mike Ashley’s Frasers Group said it has finally resolved a €674 million (£588 million) dispute with the Belgian tax authority.
It said it took the “decision to settle these matters now given the uncertainty” affecting the company’s finances.
Last year, the company’s financial results were delayed after the retail group was hit by the tax claim shortly before its annual figures were due to be announced.
It subsequently split with its accounting firm Grant Thornton, replacing them with auditor RSM in October.
The Sports Direct owner also told shareholders that the company was not “accepted as eligible” for the Bank of England’s Covid Corporate Financing Facility (CCFF).
Companies such as Primark owner Associated British Foods have announced recently that they are eligible to join the scheme, which is administered by the central bank on behalf of the Government.
In a statement, the company said: “Frasers Group has taken the commercial decision to settle these matters now given the uncertainty is affecting Frasers Group’s banking lines and its suppliers’ credit insurance where, due to store closures as a result of the current Covid-19 crisis, Frasers Group understands the majority of new credit insurance cover has been withdrawn for the time being.”
Frasers Group, which rebranded from Sports Direct International last year, has closed its stores following the Government-mandated lockdown in response to coronavirus.
Mike Ashley drew criticism from MPs and unions last month after he initially tried to claim Sports Direct was an essential operator for keeping the nation fit in a bid to keep stores open.
He later apologised for “ill-judged and poorly timed” emails to the Government and poor communication with employees.
It comes amid speculation that the entrepreneur is to sell Newcastle United – the football club he bought in 2007 – for around £300 million.
Shares in the Frasers Group dipped 2.1% to 231.2p in early trading.