JJB Sports has pledged its support for chairman Sir David Jones, after controversy erupted over a £1.5m loan made to Jones by rival Sports Direct boss Mike Ashley.
A statement this morning said that the loan was made known to the JJB Sports’ executive directors and financial and legal advisers earlier this year. The company deemed the arrangement to be a private one not needing to be publicly disclosed. The JJB Sports board said that the loan did not give rise to any conflict of interest.
The JJB Sports statement followed press reports over the weekend that Jones had borrowed the money for one of his investments, a software company Advanced Network Technologies.
JJB Sports said that details of the loan, including interest rates and the option to convert the loan into shares in the software company had been made known to it.
The JJB Sports statement said that Jones would repay the loan as soon as possible to avoid “further distraction for the company and its business”. The board considers the matter closed.
The statement said: “The board expresses its unanimous support for Sir David and takes the opportunity to thank him for leading the company through the successful disposal of the group’s fitness clubs business, the CVA process and a bank refinancing in his first six months as executive chairman. The board believes that he is the right person to lead the company through the next phase of the group’s restructuring and to turnaround its sports retail business.”
Yesterday JJB Sports confirmed that it was considering a rights issue among other options to raise £50m for the business.