* Investor Forum represents 12 pct of Sports Direct equity
* Wants fully independent review into corporate governance
* Sports Direct AGM on Sept. 7
* Shares down 48 pct so far this year (Adds stance of shareholder Legal & General)
By James Davey
LONDON, Aug 25 (Reuters) - An investor group whose membersmanage 850 billion pounds ($1.1 trillion) of UK equities hastaken the unusual step of publicly rebuking the management ofSports Direct and calling for an independent review.
The Investor Forum, which speaks for some 12 percent of theretailer's equity, called on Thursday on the Sports Direct boardand billionaire founder Mike Ashley to launch an independentreview of its corporate governance at its annual shareholdermeeting (AGM) on Sept. 7, and to implement any recommendations.
The forum comprises 40 asset managers, insurance companies,pension funds and endowments.
Ashley, who owns 55 percent of the sportswear retailer, hasbeen fiercely criticised this year by senior politicians, unionsand shareholders after a newspaper investigation revealed someworkers received less than the minimum wage.
In July, British lawmakers said Ashley should be heldaccountable for what they called "appalling" working conditionsand practices at the retailer's shops and warehouse, saying theenvironment was closer to that of a Victorian workhouse than amodern, reputable retailer.
The company's corporate governance has also come under fireafter Ashley admitted the firm may have outgrown his ability tomanage it.
Sports Direct, a mainstay of Britain's shopping streetsoffering low-priced sports goods through 450 stores, has had atorrid year, issuing three profit warnings and losing itsplace in Britain's FTSE 100 index of leading shares.
The stock, which has fallen 48 percent this year, was down9.6 pence at 300 pence at 1254 GMT, valuing the business at 1.78billion pounds.
Sports Direct could not be immediately reached for comment.
On Wednesday, it said it would host an Open Day forinterested observers at its Shirebrook headquarters in centralEngland on the same day as its AGM.
SERIOUS QUESTIONS
The company said last week that a report on workingpractices being undertaken by law firm RPC, which will reviewand report on an internal investigation announced last December,will be published in the week of the annual meeting. It alsosaid an external evaluation of the board was planned.
The Investor Forum, however, said RPC's remit was too narrowand in any case the law firm could not be considered independentas Sports Direct already has a relationship with it. Theinvestors also said the planned external board evaluation failedto reflect the breadth and magnitude of the reform required.
They want a review of corporate governance and boardoversight, related party transactions and potential conflicts ofinterest, employment practices, acquisition strategy, oversightof supplier relationships and the management of stores.
"Should the non-executive directors be unwilling toimplement this review, serious questions will be raised as towhether they truly represent the interests of all shareholders,"said the forum. "Shareholders will have to consider their votingat the AGM with great care given recent events at the company."
At the AGM, shareholders will vote on a resolution putforward by the Unite trade union calling for an independentreview into work practices.
That resolution has been backed by the Local AuthorityPension Fund Forum (LAPFF) and Legal & General InvestmentManagement, the fund arm of insurer Legal & General,which is Sports Direct's 11th largest shareholder with a 1.02percent stake, according to Reuters data.
Legal & General also said on Thursday it would oppose there-election of chairman Keith Hellawell for the thirdconsecutive year, as well as his fellow non-executive directors.
Shareholder advisory group Pensions and Investment ResearchConsultants (PIRC) has recommended Sports Direct investors voteagainst the re-election of both Hellawell and Ashley, who holdsthe executive deputy chairman role. (Additional reporting by Carolyn Cohn; editing by David Clarke)
