The chairman of Sports Direct’s parent company bought almost 4,000 shares in the company “in error” on Monday, violating rules banning managers from trading shares in the period leading up to results.
Frasers Group (FRAS.L), which owns Sports Direct and House of Frasers, said in a statement to the stock market on Tuesday afternoon that non-executive chairman David Daly had purchased 3,912 shares in the company for over £11,000 ($14,546) on Monday.
The transaction violates market abuse regulation that bans people with direct managerial responsibilities (PDMRs) from dealing in company shares for 30 days before half-year or full-year results are published. Frasers Group is due to publish its annual results on Thursday.
“The shares were purchased in error during a closed period,” the company said in a statement. “The Company has robust procedures in place before PDMRs can trade in shares which were accidentally not followed in this instance.”
Frasers Group said Daly sold the shares within 15 minutes of buying them after realising the error. He made a small profit on the trade, which has been donated to charity.
The ban on trading during a closed period is meant to stop managers profiting from inside information after accounts are finalised but before they are published.
Frasers Group said on Tuesday directors had been “reminded of their obligations and the internal procedures.”
The blunder is likely to fuel the image of billionaire Mike Ashley’s Frasers Group as a freewheeling and poorly managed company, despite its success. Ashely, who founded and runs the company, has made headlines for his propensity for risky corporate bets and his self-proclaimed love of drinking. Ashley has faced inquiries by MPs over his treatment of workers and weathered repeated investor rebellions over his management style.
Frasers Group was originally due to publish its annual results last week but said publication would be delayed just two days before they were due. The company blamed a hold up with its auditors, who were “robustly review[ing] the final accounts and [would] ensure that all necessary disclosures have been completed.”
“For the avoidance of doubt we can confirm there are no significant matters to address outside of normal audit completion procedures and the final accounts disclosure review,” the company said.
It marks the second year in a row that Frasers Group’s annual accounts have been delayed by auditing issues.
Shares in the company fell 2% on Tuesday.
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