Mike Ashley 'paid Sports Direct's chief executive £1m bonuses in secret so he could keep down other staff's wages'

Bonuses were allegedly paid as 'a side payment so as artificially to cap the wages of other staff', according to Jeff Blue, a financier who is suing the Sports Direct founder

Mr Ashley also allegedly paid chief executive Dave Forsey a further £5m in secret after the sportswear chain floated on the stock market in 2007 (PA)

Sports Direct founder Mike Ashley reportedly paid a former chief executive a secret £1m-a-year bonus from his personal account so that he could keep it from other senior employees and pay them less.

The billionaire tycoon allegedly gave Dave Forsey the extra money on top of his official £150,000 salary as “a side payment so as artificially to cap the wages of other staff”, according to Jeff Blue, a financier who is suing Mr Ashley.

Mr Ashley also allegedly paid Mr Forsey a further £5m in secret after the sportswear chain floated on the stock market in 2007, the Guardian reports, citing court documents. The sale made Mr Ashley a billionaire.

Last year, Mr Ashley was found to have paid Sports Direct warehouse workers less than minimum wage. MPs accused the company of overseeing “Victorian workhouse” conditions at its distribution centre.

The latest allegations come from former Merrill Lynch banker Jeff Blue, who is suing Mr Ashley in the High Court over a £15m payment which he says the Sports Direct boss reneged on. Mr Ashley denies the claim.

“According to Sports Direct’s annual reports, Mr Forsey receives an annual salary of £150,000 per annum,” Mr Blue reportedly said in evidence filed with the claim.

“On that basis, Mr Forsey receives one of the lowest salaries of any chief executive leading a FTSE 100 or FTSE 250 listed company.

“However … I was subsequently informed by Peter Cowgill [executive chairman of JD Sports] in separate conversations that Mr Forsey is in fact paid up to £1m per annum directly by Mr Ashley. One benefit of this arrangement is that it imposes an artificial cap on all other salaries paid to employees at Sports Direct.”

Mr Blue’s evidence also claims that, “Mr Ashley was like no other client that anyone at Merrill Lynch had ever come across.”

His £15m deal was allegedly sealed during one of the boozy meetings he alleges were a normal part of the Sports Direct culture.

During one such meeting Mr Ashley is said to have drunk 12 pints of lager, each followed by a vodka chaser, before vomiting into a pub fireplace, to the applause of his senior management team.

Mr Ashley is due to give evidence at the high court on Wednesday.