JJB Sports founder Dave Whelan has accused Sports Direct boss Mike Ashley of “trying to blacken” the formerly unblemished name of Sir David Jones in the latest row to rock the turbulent sportswear sector.
It was revealed last weekend that Jones, who is JJB Sports executive chairman, received a £1.5m personal loan from Ashley in 2007. Whelan claimed his old adversary Ashley had engineered the disclosure of the loan to undermine Jones. He told Retail Week: “Jones took the loan in good faith and he [Ashley] has leaked the documents.”
It was unclear as Retail Week went to press whether the controversy would unseat Jones, but it has dampened the retail grandee’s otherwise untarnished reputation.
It has been claimed Ashley wants to derail JJB’s plan to raise capital.
JJB, some of its leading shareholders and the City have backed Jones, citing his skill in bringing JJB back from the brink at the start of the year.
Shareholder Harris Associates – which has a 13 per cent stake in JJB – has backed Jones over the row. Chief investment officer David Herro said: “We remain 100 per cent supportive of the chairman.”
“No one is looking into this,” said the US-based investor. “I don’t know how it can be? Unless this isn’t the United Kingdom but Indonesia.”
Banking sources said the loan controversy was unlikely to affect JJB’s attempts to raise capital. As well as considering a £50m share placing, JJB hopes to extend its working capital facility beyond September 2010.
One banker said: “The issue of the loan is separate to trading and how the company is doing. Sir David is still highly regarded for what he did at Next and now JJB. I don’t think this will make any difference.”
But another warned: “If it turns out Sir David has said one thing and done another, it becomes difficult.”
Following a statement of support to the London Stock Exchange from JJB, which said the loan was agreed before Jones became non-executive director, Ashley was reported to have said he was approached after Jones had joined the JJB board.
Sources close to Jones said that he was highly embarrassed by the matter but that they were hopeful it would not lead to his exit from the retailer. Whelan said: “He is a fighter and he wants to help JJB survive.”
Sports Direct and Jones were not available for comment.