Mike Ashley hands Sports Direct over to his prospective son-in-law as the City rolls its eyes

This may be the shape of things to come. The UK listing rules are being reformed to make Ashley-style antics easier for powerful business founders, writes James Moore

Quixotic billionaire Mike Ashley, founder of Sports Direct and current boss of Frasers Group (PA)

Michael Murray’s 2011 holiday was a vacation for the ages. In it, he not only reportedly met his fiance, he had his passport stamped with a visa facilitating entry into Britain’s exclusive multimillionaire CEO club.

Murray’s fiance is, you see, Anna Ashley. She is the daughter of Sports Direct founder Mike Ashley, whose retail empire, under the banner of Frasers Group, the 31-year-old Murray is now “transitioning” to take over as CEO.

It has been quite a ride for the former nightclub promotor, who started off advising Ashley on property deals (his father is a property developer), rising to become the soon-to-be-former CEO’s right-hand man in charge of the overhaul of a store estate that had been looking decidedly shabby and was upsetting some of the external brands the group works with.

To be fair, he appears to have had some success there. Things have improved of late.

The shares nonetheless wobbled in response to the announcement, but soon made up some of the ground they had lost.

There are a couple of readings you can put on investors’ apparent tolerance for Ashley’s typically eccentric dynastic succession plans.

Firstly, this is Frasers Group, which encompasses a sprawling retail empire that includes a dizzying array of outlets and in-house brands. Investors should be aware of what they’re getting when they buy in. While the Murray move has induced several bouts of eye rolling, it’s hardly eye popping in terms of surprise given Ashely’s quixotic style and past form.

Secondly, he’s still going to be around as an executive director after the group has completed the transition to Murray’s leadership, which presumably includes the latter becoming an official employee (he’s currently paid as a consultant). This means that Ashley will remain closely involved in the running of the thing, you would imagine in a strategic and supervisory role.

Finally, Ashley is a billionaire and billionaires, however eccentric, don’t tend to be overly keen on surrendering their wealth. So he’ll doubtless do what is necessary if things start to come unstuck.

The combination of these factors should keep the show on the road.

Dynastic games like this aren’t actually as uncommon in public companies as you might hope or imagine. The CEO of Associated British Foods (owner of Primark), a FTSE 100 member, is, for example, George Weston, a member of the controlling family, who spent years being groomed for the job through working in various parts of the family’s business interests. The way Rupert Murdoch runs his empire would be another example.

The Frasers Group that Murray will be taking over has proved relatively resilient of late. Its premium lifestyle division, which includes the horribly named Flannels, even recorded a measure of growth over the year to the end of April, which has to be some sort of achievement when you consider how much of planet retail has resembled Pluto in the past year.

So maybe this works out. Maybe Murray’s ascension will prove to be another of those times Ashley has got it right despite the fact that it looks fairly awful. It’s happened before.

In the meantime, buckle up. The matter of Murray’s remuneration will probably be the first point of contention when the details are released. It will likely prove entertaining in a schlocky “did they really do that” reality TV type way.

We may also be seeing more of this sort of thing in future as a result of the planned changes to the UK’s listing rules, which are being tweaked with a view to attracting more interesting and funky tech firms to London, which tend to have hands on founders reluctant to give up control when they go public.

Reforms currently out for consultation will allow companies with dual class shares to secure premium listings in London. These are typically used to allow the people who set up businesses to retain voting control even if they surrender economic control when they join the stock market.

The requirement for a minimum “free float” of shares in the hands of minority investors is also set to be lowered, among other things.

It’s true that Mike Ashley has been thumbing his nose at the City, and stomping over its conventions, almost since the day Sports Direct Group joined the London market, which happened long before these changes were even being discussed. The reforms are basically irrelevant to this latest episode of corporate Game of Thrones.

They could, however, make it easier for future Mike Ashleys to do their thing. There’s a price that comes with surrendering your standards, especially when they relate to corporate governance.