Loan probe at JJB annual meeting
JJB Sports chairman David Jones is expected to face a public grilling from business rival Mike Ashley over a controversial £1.5m (€1.7m) loan at the group’s annual general meeting today.
Mr Ashley, the billionaire behind Sports Direct International and the owner of Newcastle United football club, is planning to send a representative to JJB’s meeting in Wigan, England – or even attend in person to quiz Jones about the loan.
The two businessmen have been in loggerheads over the loan, with tensions mounting over the timing of the agreement between Jones and Mr Ashley.
JJB maintains the loan – made in 2007 to fund a private business venture owned by Jones, called Advance Network Technologies – was secured before Jones joined the JJB board.
But Sports Direct claims the loan was made on October 25, 2007, after Jones took up his seat as a non-executive on October 1.
It made a letter between the two businessmen public at the weekend which detailed the terms and timings of the loan and appeared to have been signed by Jones.
Jones missed a number of initial payment deadlines, but repaid the loan in full two weeks ago after the issue erupted, and the JJB board has offered him its full support.
However, JJB has failed to put the issue to bed as questions remain over potential conflicts of issue.
And today’s questioning at the JJB meeting is likely to heap further pressure on Jones.
It is thought that Mr Ashley has prepared a list of more than two dozen questions to fire at Jones over the loan and what the JJB board knew about the agreement.
Mr Ashley has a stake in JJB, although it is unclear how many shares he owns after his Sports Direct business only recently offloaded its 4.8% directly-owned shareholding in the firm.
A JJB spokesman said: “If he is a shareholder he has the right to attend and ask questions as do other shareholders.”
The loan has raised eyebrows, given the close ties between Sports Direct and JJB.
Aside from being close rivals, they are also trading partners, with JJB stocking a number of Sports Direct brands.
Mr Ashley is understood to be a friend of Chris Ronnie, the former boss of JJB who was dismissed over a controversial share sale earlier this year.
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 after an extensive disposal and closure programme.
Jones – credited with turning around fashion chain Next – was promoted to executive chairman of JJB from deputy chairman in January.
