LONDON — Sports Direct’s billionaire founder Mike Ashley treated company directors to a lavish Mayfair dinner where they drank the restaurant’s entire supply of £3,000 red wine before heading to a casino, according to testimony from a court dispute.
Ashley is being sued by former business associate Jeff Blue over an alleged £15 million bonus scheme.
Blue, a former Merrill Lynch banker, claims Ashley agreed to pay him £15 million if he could help get Sports Direct’s share price from £4 to £8, a level it reached in 2013. However, Ashley only paid Blue £1 million.
The Sports Direct billionaire’s defence is that the deal was simply pub “banter” — the deal was hatched in London’s Horse & Groom while the pair were drinking with associates.
Blue is demonstrating in his testimony that Ashley regularly conducted business while consuming alcohol in locations like pubs, casinos, and restaurants.
In one part of his testimony, Blue recalls a dinner he attended in February 2014 with Ashley, Sports Direct CEO Dave Forsey, and the company’s non-executive directors, during which time cocktails and wine were drunk. Here is Blue’s testimony (emphasis ours):
“Pre-dinner drinks were held at the Mr Fogg’s Residence cocktail bar at 15 Bruton Lane, London. Dinner was held in a private dining room at Benares restaurant at 12a Berkeley Square House. The dinner commenced with Mr Ashley ordering more drinks, in this case the most expensive red wine available from the sommelier (Richebourg at around some £3,000 per bottle). When supplies of this had been exhausted, Mr Ashley continued with the Penfolds Grange (£875 per bottle). Following dinner, the party retired to Les Ambassadeurs, a London casino where Mr Ashley and the non-executive directors played at the roulette table. Having no interest in gambling with Mr Ashley, I was one of the first to depart, leaving Mr Ashley and Mr Forsey with the non-executive directors.”
The dinner in question came a week before the independent directors approved a potentially lucrative bonus scheme that could have netted Ashley up to £64 million in Sports Direct shares. However, the scheme was later abandoned due to shareholder anger.
Blue claims Ashley was angry that the scheme collapsed despite his lavish treatment of his non-executive directors.
“How dare they lecture me about corporate governance when they’re all happy to sit around and get pissed on £3,000 bottles of wine at the company’s expense and then go to a casino, not believing their f*****g luck when they wake up the next morning with a £20,000 casino chip in their pocket or purse,” Blue reported Ashley as saying.
The 2014 dinner at Benares is one of a number of lurid episodes painted in Blue’s testimony. The former banker also claims that allegedly held drinking contests during management meetings, once vomited in a fireplace, and took naps in meetings when bored.
Ashley will give evidence on Wednesday to defend himself and is expected to dispute many of Blue’s claims. David Cavender QC, Ashley’s barrister, accused Blue of “pure invention” under cross-examination on the first day of the trial on Monday, the Financial Times reports.
The case is set to run until next Wednesday.