FSA to investigate JJB CEO’s share transfer
The Financial Services Authority has launched an investigation into share disposals at JJB after the retailer revealed yesterday that a company jointly controlled by chief executive Chris Ronnie had offloaded a 27.5% stake in JJB without disclosing the disposal.
Chris Ronnie, the CEO of JJB Sports, has admitted that his 27.5 per cent stake in the retailer now owned by the liquidators of Kaupthing, the collapsed Icelandic bank.
Ronnie no longer owns any shares in the company after Kaupthing Singer & Friedlander took control of his stake.
KSF, the UK unit of Icelandic state-controlled bank Kaupthing, has since gone into administration and the stake is now in the hands of administrators PriceWaterhouseCoopers and Ernst and Young. JJB said in a statement yesterday that Kaupthing had seized control of the stake owned by the joint venture, now known as Guro Leisure Limited, but that Chris Ronnie had not been aware of the date, place or price of the transaction.
News of the shares deal emerged following an investigation launched by executive chairman Sir David Jones. He was appointed to the executive role two weeks ago to attempt to reverse the ailing retailers fortunes.
The investigation is not yet complete, but Jones is thought already to have deep reservations about Ronnie’s continuing role in JJB.
Michael Simpson, joint administrator at PwC, said: ‘I will be taking a careful and considered approach in respect of the collateral shares, particularly given the size of the shareholdings. ‘I would stress that there is no requirement for me to dispose of these positions within a set time frame.’
JJB’s shares can expect a rough time when trading opens later this morning as analysts will fear that any possible future disposal of shares will further dent the share price.
UPDATE – Shares were down more than 23 per cent at 08.30am today
