Mike Ashley’s Sports Direct has warned that its House of Fraser chain has “terminal” problems as the company revealed it had been hit with a bombshell €674m (£605m) tax bill from the Belgian authorities.

In an extraordinary statement issued 10 hours late – and after the stock exchange had closed – the maverick businessman laid bare the state of his retail empire.

The billionaire chief executive, who also owns Newcastle United, said that the desperate state of the House of Fraser chain, which the group bought out of administration in 2018, had created “significant uncertainty” as to the future profitability of the entire group. Its main Sports Direct chain was also struggling against a backdrop of tough trading conditions, with weak underlying sales.

In the 38-page document, which at various points descended into Ashley’s personal rants about the failings of “self-interested” City advisers, the company said:

It had received a €674m tax bill from the Belgian authorities that relates to products that had been routed internally via Belgium.

House of Fraser’s financial problems could be “terminal” with more store closures likely.

In a frank admission, Ashley indicated that he regretted the House of Fraser deal: “If we had the gift of hindsight we might have made a different decision in August 2018.”

Its finance director Jon Kempster is stepping down in September, the third senior departure in recent weeks.

The chief executives and finance directors of listed companies should have voluntary drug tests so as to avoid blackmail.

Some analysts fear that the colourful deal-maker has taken on too much in the last 18 months, after a buying spree that has seen the £3.7bn group acquire Evans Cycles, the furniture business Sofa.com, and Game Digital, as well as House of Fraser.

The company’s results were originally due to be released on 18 July, but publication was postponed when Sports Direct admitted that the complexities of its House of Fraser takeover and tighter regulatory scrutiny of its auditor, Grant Thornton, due to its role in the Patisserie Valerie collapse, were making the financial results more complicated to prepare.

Throughout Friday, Sports Direct set several new deadlines for the publication of its results – a routine process that for listed companies happens at 7am – only for them to miss them until after the market had closed. Neil Wilson, an analyst at share trading platform Markets.com, described the delays as a “total and utter shambles”.

Wilson said the delays showed a total disregard for shareholders: “It not only raises questions about the haphazard way in which the investor relations and finance teams are run … it raises a question about whether Ashley will ultimately take the company private.”

The hefty tax bill was the biggest upset in the figures as it is the equivalent of several years of annual profits. The tax shock came as the group said it could not put a figure on its future profitability because of the disastrous buyout of the House of Fraser chain, which lost £1m a week in the year to the end of April. Profits for the overall group were up 5% at £142.3m for the year to April, but that was at the bottom end of expectations.

Even before the tax demand came to light, the chaotic day had hit the company’s share price, which closed down nearly 4% at 234p. The company told a half-empty meeting of analysts late on Friday night that the demand had come in at “the 11th hour”. It said it would respond to the requests for information and appeared optimistic that it could fight off the bill.

In a stark warning that will worry House of Fraser staff, who have already endured a year of uncertainty following the takeover last August, Ashley said the retailer was struggling to make some stores work even when it was paying landlords no rent at all. So far, just five stores have closed, leaving 54 still trading, but Ashley said it had discovered problems that were “nothing short of terminal in nature”.

“On a scale out of 5, with 1 being very bad and 5 being very good, House of Fraser is a 1,” Ashley said, in characteristically blunt language. “There are still a number of stores which are currently paying zero rent and that are still unprofitable, and unfortunately this is not sustainable.”

The billionaire is a controversial figure in the City. He famously resorted to a game of spoof to settle a £200,000 legal bill and a court case revealed the billionaire’s penchant for extreme drinking competitions, one of which ended with him vomiting into a fireplace.

In a bizarre aside, Ashley made a case for City regulators to ask senior management to take voluntary drug tests, his rationale being that personal issues could lead to blackmail and senior managers making decisions based on “saving their own skin”.

He also lashed out at regulators who he said did not have sufficient teeth to prevent self-interested City professionals like lawyers and accountants taking actions that were “absolutely not in the best interests of their clients and other relevant stakeholders” so that they could earn big fees.

Shares in the retail group, in which Ashley is the biggest shareholder, with a stake of almost 62%, have fallen in value by more than 40% in the past year, as analysts became increasingly concerned that the company was struggling to integrate the new business.

Ashley’s behaviour had also been erratic as he fought a bitter and ultimately unsuccessful battle for control of Debenhams. The businessman is also embroiled in a bust-up with Goals Soccer Centre, the five-a-side pitch operator whose shares dived after the company admitted that it had underpaid VAT.

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As Ashley struggles to turn around House of Fraser, Sports Direct has also been struck by the departure of several key executives, including Ashley’s long-term lieutenant, Karen Byers. The departure of finance director John Kempster was also unexpected.