Mike Ashley’s Sports Direct to be investigated by the Serious Fraud Office
More great news for Newcastle’s much-loved owner
Youngsters who hang about at bus stops waiting to earn an ASBO will be devastated to learn that their clothing purveyors of choice – JJB Sports and Sports Direct – are to be investigated by the Serious Fraud Office for price fixing and fraud.
Dave Whelan’s former company and Mike Ashley’s current profit-zapping outfit have been the subject of a secret investigation by the Office of Fair Trading since January. The Guardian’s business eggheads report:
JJB this morning told shareholders that it had sparked the probe with an approach to the OFT just 10 days after the company suspended its former chief executive, Chris Ronnie. It claims to have negotiated immunity in exchange for whistle-blowing co-operation.
In a statement the OFT said it had earlier today “executed entry warrants at two addresses as part of an investigation into anti-competitive conduct in the sports goods retail sector”.
These sports retailers are no strangers to price fixing allegations: Ashley incurred the wrath of Whelan in 2000, when he became a whistleblower, revealing price fixing of Manchester Utd and England shirts among his rivals.
JJB were fined £5.5m following the investigation, but the punishments this time round could be much steeper: under the Enterprise Act of 2002, price fixing is a criminal offence that could result in prison sentences.