What appears to have been a simple typing error has precipitated a legal battle between Tesco and a subsidiary of Sports Direct, run by the colourful businessman Mike Ashley.
Universal Cycles, an Essex-based firm owned by Sports Direct, supplied Tesco with six Muddy Fox Suspension Bikes, and billed it for £984. Tesco's finance team duly paid up, in August – but put a zero where there was meant to be a full stop, and paid £984,000, or £164,000 per bike.
The argument began when Tesco spotted the mistake and asked for the money back within 15 days. According to papers filed at the High Court, Universal repaid about £863,000, but held on to £121,412. It is thought that the supplier is claiming that Tesco owes it the money from other transactions. Tesco is demanding its money back, plus legal costs, and £1,783 interest. The matter may yet be settled out of court.
The dispute with Tesco is only one of Mr Ashley's problems. He owns the troubled Newcastle United Football Club, and outraged supporters earlier this month by announcing that their famous grounds are to be renamed sportsdirect.com@StJames' Park for the next six months. Mr Ashley hopes to attract another sponsor to buy the right to have its brand name in front of "@StJames' Park".
His sportswear chain is currently under investigation by the Serious Fraud Office (SFO) for "suspected agreement or concerted practice to dampen competition in the sports retail market". The investigation began in September after a rival chain, JJB, admitted its involvement in the wrongdoing, asking for immunity for its cooperation with the investigation.
Yesterday, the former government drugs adviser Keith Hellawell was appointed chairman of Sports Direct. Mr Ashley, who owns 71 per cent of the business, is deputy chairman.
Mr Hellawell has no City experience, but he can offer Sports Direct experience in dealing with financial controversy. He was previously chairman of Goldshield, one of five drug companies accused by the SFO of cheating the NHS out of tens of millions of pounds. The case dragged on for six years, and cost an estimated £25m, before being dismissed by the House of Lords in December.
The amount Tesco paid Essex-based Universal Cycles for each of the six Muddy Fox bikes it bought.Reuse content