RETAILER JJB Sports yesterday confirmed that chairman Sir David Jones borrowed £1.5 million from the billionaire chief of rival Sports Direct in a move that raised potential conflict of interest concerns.
Mike Ashley, who also owns Newcastle United, lent Jones the cash in October 2007 to fund a private business venture, according to JJB. It said the loan – which remains outstanding – was made to raise funds for a software firm owned by Jones called A
dvance Network Technologies.
The report emerged as rumours were also swirling over an imminent investor cash call by JJB to raise at least £50m. The group last night confirmed it was looking at the move as one of a range of options.
News of the loan risks attracting further controversy for the troubled firm, given the strong commercial relationship between the sports chains. Mr Ashley is also believed to indirectly hold shares in JJB.
A JJB spokesman insisted the loan was "made on commercial terms" while Jones was a non- executive director, adding it was a "personal matter between them".
Wigan-based JJB only recently agreed a rescue deal with landlords to stave off administration, but it has seen like-for-like sales continue to fall and suppliers growing reluctant to deal with the firm following its high-profile troubles.
Meanwhile, the group's former boss, Chris Ronnie, is understood to have been under investigation by the Financial Services Authority over a share sale, although the inquiry has reportedly been discontinued.
Sports Direct and JJB are the two largest specialist retailers of sports-related clothing, footwear and equipment in the UK. Sports Direct has more than 350 outlets, while JJB has reduced its portfolio to 253 stores.
The full article contains 290 words and appears in The Scotsman newspaper.
