Sports Direct vows to fight for Blacks and JD holdings
Wednesday 28 October 2009
The spat between Sports Direct and Newcastle United owner Mike Ashley and Kaupthing Singer and Friedlander's administrators reached a new level yesterday as the two parties traded yet another round of claims over disputed shares.
The row has been rumbling since KSF – the UK arm of failed Icelandic bank Kaupthing – collapsed last October, taking Sports Direct's holdings of 28.5 per cent of the voting rights in Blacks and 11.9 per cent of JD Sports with it.
Because the purchases were financed and held by KSF, Ernst & Young maintains that they belong to it, as administrator, and the company said yesterday it is seeking a court ruling on ownership of the shares, following regulatory statements from both JD Sports and Blacks that the shareholdings were in the administrators' hands. "The joint administrators are applying to the court for directions as to beneficial ownership of the shares in respect of the dispute," Ernst & Young said.
But the statement met with a swift response from Sports Direct that the company "continues to resist" efforts to appropriate its stakes in Blacks and JD Sports, and confirming it is "in the process of taking an action" against the bank and its administrators. "Those parties are aware of our determination to protect and vindicate our legal rights and the situation remains ongoing," the company said.
Sports Direct, which is 71 per cent owned by Mr Ashley, has already written off £53m in relation to the holdings, taking its profits for the year to April down to just £11m, from £119m the year before.
The group is also in a tussle with the competition watchdog over the purchase of 31 stores from rival JJB Sports. It was told to sell five of the shops but has failed to find a buyer.
Mr Ashley is believed to be trying to sell Newcastle United.
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