Sir David Jones, one of Britain’s most successful retailers, credited with building Next into one of the UK’s largest fashion groups, has been charged in relation to alleged misleading statements during his time as executive chairman at now bust sportswear chain JJB Sports.
Jones, who turned 70 this month and has been living with Parkinson’s disease since 1982, is charged along with his son and occasional business partner Stuart Jones, 38. Both men, who live at separate addresses in West Yorkshire, declined to comment through their lawyers Eversheds. Stuart Jones was, for a period in 2009, JJB’s head of marketing.
David Jones is charged with two counts of making misleading statements to the stock market and also an additional forgery-related offence. His son is charged with a single offence of aiding or abetting the alleged used of forged materials.
It is the second Serious Fraud Office (SFO) case to emanate from a 2009 feud between David Jones and Chris Ronnie, who was dismissed as JJB chief executive in March of that year. In the months that followed, allegations about Jones’s private finances appeared in the press while JJB took a file of allegations, many of them concerning Ronnie, to the Office of Fair Trading and later the SFO.
Several avenues of inquiry pursued by the authorities were discontinued. But Ronnie was charged in April with fraud and money-laundering offences. On the indictment with him is David Ball, joint-owner of a JJB supplier, who is accused of offences under the Theft Act 1968. Both men are understood to deny wrongdoing.
Wholly unrelated charges in relation to Jones, revealed on Friday, are believed to be linked to statements made by JJB in 2009 following several press reports about his private finances. The first statement concerned a £1.5m loan advanced by Mike Ashley, majority-owner of rival chain Sports Direct, to Jones. JJB told investors in July 2009 this advance was “for investment in Advanced Network Technologies”, a private tech firm controlled by Jones family members, including Stuart Jones.
Three months later, in the middle of a £100m rights issue, JJB came under pressure to give a further statement as rumours began to circulate that David Jones had borrowed £1.5m in order to repay the loan to Ashley. The rumour was that this second loan came from former JJB owner Dave Whelan, owner of Wigan Athletic football club and a major donor to David Cameron.
In a statement to the stock exchange, JJB said: “During the course of Friday morning, the company was made aware of rumours that were circulating in the press and financial markets in relation to Sir David Jones’s personal financial affairs and decided to delay the proposed capital raising until it had the opportunity to further investigate these rumours. The board has now concluded its investigation and found these rumours to be totally unfounded.”
At the time, Whelan, who was no longer linked to JJB, was reported to have denied rumours he had repaid the Ashley loan on Jones’s behalf. “It’s the first I’ve heard of it,” the Mail on Sunday quoted him as saying. Contacted by the Guardian on Friday, Whelan said that report was not correct. “I lent David Jones some money to pay it [the Ashley loan] back … He wanted to get from under the thumb of Mike Ashley. I have nothing to hide. I have never denied it.”
The SFO’s scrutiny of Jones’s financial affairs, as presented in JJB statements to investors, stemmed from an inquiry that started out as a probe into allegations concerning Ronnie that the firm had brought to the attention of the authorities.
The spat between Jones and Ronnie spilled out into the public arena after the latter was ejected from JJB. Ronnie, a former lieutenant of Sports Direct owner Mike Ashley, had been installed in the JJB boardroom after buying a 29% stake in the business through a vehicle also backed by Icelandic investor Exista. He borrowed the money to buy the stake from Kaupthing, the Icelandic bank which collapsed in October 2008. Exista had been the largest shareholder in Kaupthing.
Ronnie was suspended from JJB in January 2009 after it emerged that his shares had been seized by administrators to Kaupthing. He was dismissed in March.
Jones is best known for his tenure at Next, which started when he joined form the Grattan catalogue business in 1986 and was installed as chief executive two years later following the removal of Next’s founder George Davies.
At the time, the chain was on the brink of collapse but Jones rebuilt it into Britain’s third biggest fashion business with more than 550 outlets.
David and Stuart Jones appeared at Leeds magistrates court on Friday yesterday to be formally charged. They were released on unconditional bail and the case will next be heard at crown court on 19 April.
NEOS UPDATE – In the interests of fair journalism, we offered Mr Stephen Rudofsky the opportunity to respond to our questions posed to him on this blog aswell as to correct any perceived inaccuracies. To date we have received no reply and simply note his intention to resign at the point of the EGM to vote on the de-listing of the company – a company he made rosy references to its future just months before… The dossier of evidence in relation to what appear to be misleading RNS statements has been delivered to the FSA & AIM Investigations depts
IF YOU HAVE PERSONALLY LOST MONEY ON THE STOCK IN RELIANCE ON THE STATEMENTS MADE BY MR RUDFOSKY, EMAIL US AT EDITOR@SPREADBETMAGAZINE.COM AS WE LOOK TO MOUNT A CIVIL SUIT AGAINST HIM PERSONALLY.