JJB Sports is to launch an investigation into its chief executive, Chris Ronnie, after discovering that his 27.5 per cent stake in the company was transferred to a stricken Icelandic bank at some point last year.
Mr Ronnie did not notify the beleaguered sportswear retailer of the transfer at the time. The retailer revealed that it was unaware until yesterday that the ownership of the shares had moved from its chief executive's investment vehicle, Guro Leisure, to Kaupthing Singer & Friedlander in the UK and Isle of Man.
JJB said the investigation was a serious matter which could potentially lead to Mr Ronnie being suspended.
JJB believes the share transfer may have been made to KSF because Guro Leisure defaulted on a loan from the Icelandic bank last year. However, it is unclear why Mr Ronnie or Guro Leisure (formerly known as Hallco 1480) did not notify JJB Sports about the transfer.
The affair is likely to raise further questions over Mr Ronnie's future at JJB Sports, which is labouring under hefty debts and has posted losses and falling sales. This month, JJB Sports promoted David Jones, its deputy chairman, to the position of executive chairman, to try to safeguard the future of JJB Sports, which includes the retail chain and fitness clubs. Mr Ronnie, who bought a 29 per cent stake in JJB Sports through his investment vehicle in June 2007, now holds no notifiable shareholding in the retailer.
His 27.5 per cent shareholding – the original stake was diluted after a JJB deal with rival retailer SportsDirect – is now in the hands of PricewaterhouseCoopers, KSF's administrator in the Isle of Man, and Ernst & Young, KSF's administrator in the UK.
A JJB spokesman said: "JJB has asked legal advisors to continue an investigation into this matter to look into exactly what happened and when. JJB Sports' operation will not be affected."
In December, JJB agreed with lenders Barclays, HBOS and Kau-pthing to postpone the repayment of a £20m bridging facility. Instead, JJB repaid £20m of debt to the three banks on a pro-rata basis. It has hired Lazard to conduct an auction of non-core assets.Reuse content