Mike Ashley to be repaid ‘as soon as possible’

Jul 8 2009 by Iain Laing, The Journal

JJB Sports has insisted its boss Sir David Jones will repay a £1.5m loan from Newcastle United owner Mike Ashley “as soon as possible” as it attempts to draw a line under the affair.

The group said its board stood by the executive chairman despite embarrassing revelations about Sports Direct owner Mr Ashley’s loan, which emerged at the weekend and could court controversy on potential conflicts of interest.

“The board is clear that the arrangement, that was initiated before Sir David joined the company as a non-executive director, has not given and does not give rise to any conflict of interest,” said JJB.

It added: “The board has been informed by Sir David that he intends to repay the loan as soon as possible in order to avoid further distraction for the company and its business. The board considers the matter closed.” Mr Ashley lent Sir David the cash in October 2007 to fund a private business venture – the same month he was appointed to the JJB board as a non-executive director.

It was originally due to be repaid by last November, but the date has been extended twice, most recently to June 30, 2010, although JJB’s statement suggests Sir David aims to bring forward repayment to clear the debt.

JJB said the two businessmen saw the arrangement “as a private one” which did not need to be publicly disclosed, although it confirmed Sir David had told the board earlier this year. But details of the loan have raised eyebrows, given the close ties between Sports Direct and JJB.

Aside from being rivals, they are also trading partners, with JJB stocking Sports Direct brands, while Mr Ashley is thought to hold shares in JJB indirectly, having recently sold a direct stake.