JJB boss in loan pledge

UK sports retail chain JJB Sports insisted today its boss David Jones would repay a £1.5m (€1.74m) loan from the billionaire behind rival Sports Direct “as soon as possible” as it attempted to draw a line under the affair.

The group said its board stood by the executive chairman despite the embarrassing revelations regarding Mike Ashley’s loan, which emerged over the weekend and risked courting controversy over potential conflicts of interest.

“The board is clear that the arrangement, that was initiated before Jones 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, who also owns Newcastle United football club, lent Jones 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.

The loan was made to raise funds for a software firm majority-owned by Jones and his family, called Advance Network Technologies (Ant).

It was originally due to be paid back by November 2008, but the date had been extended twice, most recently to June 30, 2010, although JJB’s statement today suggests Jones 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. However, details of the loan have raised eyebrows, given the close ties between Sports Direct and JJB.

Aside from being close rivals, they are also trading partners, with JJB stocking a number of Sports Direct brands.

And Mr Ashley is also believed to indirectly hold shares in JJB, having only recently sold off a significant direct stake in the group.

News of the loan emerged as JJB considers ways to raise at least £50m (€58m) of new capital to fund its turnaround.