The former executive chairman of the JJB Sports chain forged a bank statement to disguise his borrowing of £1.5 million from another well-known retail figure, prosecutors have told a jury.
A jury was told the businessman had already borrowed £1.5 million from Mike Ashley, the owner of Sports Direct and Newcastle United.
Today, prosecutor Miranda Moore QC said Sir David lied about both loans to the board of JJB Sports, leading the company to put out misleading statements at a time when it was trying to raise £100 million on the financial markets.
Miss Moore said the businessman forged a bank statement with the help of son Stuart Jones, who is also on trial, in October 2009. She said newspapers were about to run a story suggesting Mr Whelan had paid £1.5 million to Sir David in relation to a deal Mr Whelan had done to take over gyms from JJB.
She said this story was “absolute rubbish” but the board of JJB was concerned about the adverse publicity. These concerns were exacerbated when the Daily Telegraph confirmed to the firm’s PR consultants that it had one of Sir David’s bank statements detailing the £1.5 million payment.
In response, Sir David produced a bank statement which made no mention of this transaction and convinced the board that the Telegraph's document was a forgery – but it was the defendant who had produced the fake, Miss Moore said.
“It was a very good forgery. It fooled absolutely everyone,” she added.
She said: “The company needed this flotation. If it hadn’t had the money, the view of the company was that it would have failed by Christmas.”
The company secured the £100 million it needed, Miss Moore said. As part of that flotation, Sir David secured a £100,000 bonus.
Miss Moore said there was no suggestion this case was about anyone “receiving bungs from anyone” – it was about Sir David’s lies about the loans and how that impacted on official market-sensitive statements made by JJB Sports.
Sir David denies two charges of making a misleading statement, contrary to the Financial Services and Markets Act 2000, and one of using a false instrument, contrary to the Forgery and Counterfeiting Act 1981.
Stuart Jones, 39, of Bingley, denies one charge of aiding and abetting his father’s use of a false instrument.
The trial continues.