JJB Sports boss 'forged statement'

The former executive chairman of the now defunct JJB Sports chain forged a bank statement to disguise the fact he had borrowed £1.5 million from another well-known retail figure, prosecutors have told a jury.

Former executive chairman of the now defunct JJB Sports, Sir David Jones, arrives at Leeds Crown Court where he is accused of making false statements to the market
Former executive chairman of the now defunct JJB Sports, Sir David Jones, arrives at Leeds Crown Court where he is accused of making false statements to the market

Sir David Jones, who made his name turning around the Next stores, borrowed the cash from JJB founder Dave Whelan at a time when he was heavily in debt "possibly due to gambling", Leeds Crown Court has heard.

A jury has been told how the businessman had already borrowed £1.5 million from Mike Ashley, the billionaire owner of the Sports Direct chain and owner of Newcastle United football club.

Today, prosecutor Miranda Moore QC said Sir David lied about both loans to the board of JJB Sports and, as result, the company put out misleading statements at a time when they were trying to raise £100 million on the financial markets.

Miss Moore said the businessman forged a bank statement with the help of his son, Stuart, who is also on trial, in October 2009.

This, she was, was when newspapers were about to run a story suggesting Mr Whelan had paid £1.5 million to Sir David in relation to a deal Mr Whelan had done to take over gyms from JJB.

She said this story was "absolute rubbish" but the board of JJB was concerned about the adverse publicity as they were about to launch their flotation at a time of financial difficulty for the firm.

Miss Moore said these concerns were exacerbated when the Daily Telegraph confirmed to the firm's PR consultants that they had one of Sir David's bank statements detailing the payment to him from Mr Whelan's daughter for £1.5 million.

The prosecutor described how, in response, Sir David produced a bank statement of his own which made no mention of this transaction and convinced the board that the Telegraph's document was a forgery.

But, she said, it was the defendant who had produced the fake.

Miss Moore said: "It was a forgery. It was a very good forgery. It fooled absolutely everyone."

She told the jury of seven women and five men: "Why produce a forgery to con your board of directors, your own advisers, your own PR people?"

And she said: "The company needed this flotation. If it hadn't had the money, the view of the company was that it would have failed by Christmas."

The prosecutor said that Mr Ashley was an "aggressive competitor" of JJB Sports at the time and that "it is possible he wouldn't have been unhappy if a bit of muckraking" had derailed the firm's attempts to raise capital.

Miss Moore said the company secured the £100 million it needed because "the market was satisfied they were a good bet".

She said that as part of this flotation, Sir David secured a £100,000 bonus. The court heard that as executive chairman he had a basic salary of £378,000 plus six-figure performance-related bonuses.

She also told the court that when he first joined the board as a non-executive director in 2007, he had assets of around £29 million.

The prosecutor said: "It was a lucrative position. There was a bonus for a successful floatation and there was a lot of money being risked by people investing in the company against a background of a (statement to the stock exchange) which turned out to contain a direct lie."

Miss Moore told the jury there was no suggestion this case was about anyone "receiving bungs from anyone".

"That's not the allegation here," she said.

She said this case was about Sir David's lies in relation to the two loans and how this impacted on official market-sensitive statements made by JJB Sports.

The prosecutor said Sir David never told the truth about the loan from Mr Whelan from the moment he took the money in May 2009, to when he left the company in January 2010.

In relation to the loan made by Mr Ashley two years before, she said Sir David lied to his board about what this was for.

She said he claimed it was to finance a computer firm one of his sons was involved in, called ANT.

But she said this was not how he spent it all.

Miss Moore said there was a difference between "seeking funding for another business and seeking money to pay off his own debts".

She said: "He knew that and that's why he didn't tell the truth about why he'd taken the money from Mike Ashley."

Sir David, of Ilkley, West Yorkshire, sat in the dock today supported by his son, Stuart.

The jury has been told how he has Parkinson's Disease, how this can affect his movements and how he is able to concentrate on the trial.

He denies two charges of making a misleading statement, contrary to the Financial Services and Markets Act 2000, and one of using a false instrument, contrary to the Forgery and Counterfeiting Act 1981.

Stuart Jones, 39, of Bingley, West Yorkshire, denies one charge of aiding and abetting his father's use of a false instrument.

Judge Guy Kearl QC later adjourned the case until tomorrow.

He explained to the jury how he needed to finish early to receive updates about Sir David's medical condition "so that I'm fully informed about matters which concern my management of this trial".

The judge told the jurors they will only sit between 11am and noon tomorrow.