JJB seeks to identify who bought 10 per cent stake

JJB Sports, the troubled sportswear retailer, is to send out legal notices to investors to unearth who bought part of a large shareholding that was sold off two weeks ago. The founder of rival chain Sports Direct, Mike Ashley, will be one investor to receive the notice.

It is understood that the Financial Services Authority, which declined to comment on the issue, is looking into who purchased the 10 per cent stake in JJB that no party is yet to confirm.

The 390-store retailer will send out documents, known as "793 notices", to investors, requiring them to reveal whether they own any shares in JJB.

The revelation comes at a critical time for JJB, which is trying to safeguard its future through a company voluntary arrangement, an insolvency procedure that landlords and other unsecured creditors will vote on at the end of this month.

On 31 March, administrators at the collapsed Icelandic bank Kaupthing sold off a 23 per cent stake in JJB. Since then, JJB has confirmed that Monecor, a company that specialises in contracts for difference, had bought a 13 per cent stake. Speculation has linked Mr Ashley to the unaccounted for 10 per cent stake, but such a purchase would again pique the interest of the competition authorities.

Meanwhile, Hammerson, a major retail landlord, has lent its support to JJB's CVA, which needs the backing of 75 per cent of unsecured creditors to proceed. JJB declined to comment on the 793 notices or any other shareholder matters, but said: "We are very encouraged by the response we have received from landlords and creditors in relation to the CVA proposal."