Mike Ashley’s Sports Direct accuses Debenhams of ‘deliberately misleading’ the market

Mike Ashley’s Sports Direct has accused the Debenhams board of “deliberately misleading” the market as the retail tycoon continues to pile the pressure on the struggling high street firm.

Sports Direct, which owns a 30 per cent stake in Debenhams, has written to the Financial Conduct Authority (FCA) with concerns that recent trading updates have misled investors and further called into question the competence of the board.

Read more: Debenhams hits back at Ashley with plans to raise £110m

In January Debenhams said it was “on track” to deliver current year profits in line with market expectations.

But it issued a profit warning earlier this month saying those expectations were “no longer valid” due to economic uncertainties and increased financing costs.

Debenhams had also said in January that it continued to generate cash, but Ashley’s company said a £40m loan announced “a mere five weeks later” called that into question.

Sports Direct said the retailer’s January trading update was “at best impossibly optimistic or at worst deliberately misleading.”

It added that the board and chief executive Sergio Bucher “have no place leading a plc or making public statements to the market.

In a letter Sports Direct said: “You were clearly aware of the uncertainties in the market in January, yet you were still willing to make a statement that ‘the group is currently on track to deliver current year profits in line with market expectations’, again an example of being wildly optimistic or at worst being deliberately misleading, to the point that the board and CEO have no place leading a plc or in making public statements to the market.”

Debenhams had also said in January that it continued to generate cash, but Ashley’s company said a £40m loan announced “a mere five weeks later” called that into question.

The department store chain is also close to securing a further £110m from lenders as it looks to turnaround its performance.

Two days after the latest profit warning, Ashley took matters into his own hands with an audacious bid to axe most of Debenham’s directors and appoint himself to the board.

Read more: Debenhams shares jump on Mike Ashley power grab

The retail tycoon demanded a general meeting of shareholders to push out all but one of the existing board members and for him to take on an “executive role” in the struggling high street firm.

Debenhams and the FCA declined to comment.