Wigan May Face FSA Probe
Wigan chairman David Whelan is said to be facing a probe by the
Financial Services Authority after he sold his 29% stake in JJB
Sports on Friday.
The Sunday Telegraph said a probe would look into whether Whelan,
the founder of the sports retail chain, misled the market over the
sale of the shares after he announced to the Stock Exchange in
January that he would not sell any shares for "at least 12 months".
The announcement came after he sold an 8.6% stake in the company
for personal reasons.
Whelan, who set up JJB Sports in 1971, sold his remaining stake for
£190million last week to a joint venture formed by Icelandic
financial group Exista and Chris Ronnie, who has previously worked
at Umbro and Sports World owner Sports Direct. Whelan also stepped
down as an executive director of the group.
The FSA declined to comment on the JJB case specifically, but a
spokeswoman said: "We do monitor directives as a matter of
course."
JJB defended Whelan's actions to the Sunday Telegraph, saying that
the statement in January was intended to reassure he would not sell
his stake piecemeal in the market.
The newspaper added that he had not intended to sell his shares but
was approached by Ronnie after JJB shares tumbled 11% following a
disappointing trading update.
Whelan holds a controlling interest in Whelco Holdings which
operates the JJB Stadium, as well as Wigan Athletic Football Club
and the Wigan Warriors rugby league club.
JJB, which has more than 400 stores, said Whelan's decision to sell
his stake marked the end of an era for the firm, who appointed him
as honorary life president in recognition of his contribution to
the company.
Ronnie has been appointed as deputy chief executive of JJB, with
responsibility for sourcing and product development. He will work
alongside current chief executive Tom Knight.
Separately, The Observer reported today that Ronnie has confirmed
in writing to executives at JJB that his purchase of Whelan's stake
is not connected to Sports Direct owner Mike Ashley.
Both Ronnie and Exista have been linked to the sports retail tycoon
in the past. Exista has cross-shareholdings with Kaupthing, which
advised Ashley on his recent takeover offer for Newcastle, while
Ronnie has worked for the Sports World owner.
Sports Direct have seen their shares tumble since they floated on
the stock market in February and their chairman David Richardson
resigned last month citing difficulties in establishing working
relationships with the executive team.