JJB Sports chairman Sir David Jones is alleged to have held secret talks with rival Mike Ashley, a month after his £1.5 million loan from the Sports Direct founder could have been called in.
According to The Times newspaper, Jones met Ashley in late February at the Sports Direct head office in Shirebrook in Derbyshire, to discuss details of a pay off to Chris Ronnie, who had recently resigned as chief executive of JJB Sports and who was a close personal friend of Ashley.
The newspaper said that Ashley’s £1.5m personal loan to Jones had been due to be paid off in January. It added that because the loan was overdue, shareholders may believe there was a conflict of interest when Jones attended the February meeting about Ronnie. However JJB Sports denies the claims.
In a letter to The Times newspaper, JJB Sports’ lawyers said: “Sir David Jones was in no way compromised by his dealings with Mr Ashley and Mr Ronnie because of the existence of the business loan from Mr Ashley.”
Ronnie was initially paid a severance settlement by JJB Spots of around £230,000. However this was understood to have been returned to the company at a later date with Ronnie leaving with nothing.
JJB Sports will hold its annual general meeting later this week. It is expected to announce details of a £50 million rights issue, to help it get the business back on track. Jones is likely to face tough questions from shareholders over his relationship with Ashley. However he is hugely respected in the retail sector and many investors still believe he is the right man to lead the turnaround of the sportswear chain.