9:27am Wednesday 8th July 2009
Ilkley-based businessman and former Grattan mail order chief Sir David Jones is being backed by fellow directors at troubled retailer JJB Sports after it was revealed that he borrowed £1.5 million from the billionaire owner of a rival sports chain.
News of Sir David’s loan from Newcastle United owner Mike Ashley has raised questions about conflicts of interest as Mr Ashley’s business empire includes JJB’s rival Sports Direct .
Sir David, who is credited with turning round the Next retail chain and was knighted in the New Year honours, borrowed the cash in October 2007 to fund a private business venture, the same month he was appointed to the JJB board as a non-executive director.
The loan was made to raise funds for a software firm majority-owned by Sir David and his family, called Advance Network Technologies.
JJB Sports said its board stood by the executive chairman.
It insisted Sir David would repay the loan “as soon as possible” as it attempted to draw a line under the affair.
JJB Sports said: “The board is clear that the arrangement that was initiated before Sir David joined the company as a non-executive director, has not given and does not give rise to any conflict of interest.
“The board has been informed by Sir David that he intends to repay the loan as soon as possible in order to avoid further distraction for the company and its business.
“The board considers the matter closed.”
JJB said the two businessmen saw the arrangement “as a private one” which did not need to be publicly disclosed, although it confirmed that Sir David had informed the board of the loan earlier this year.
However, details of the loan have 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.
News of the loan emerged as JJB considers ways to raise at least £50 million of new capital to fund its turnaround.
Sir David was promoted to executive chairman of JJB from deputy chairman in January.
JJB said that it still had faith in Sir David as being the “right person” to lead its revival efforts.
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