City watchdog called in by JJB

EMBATTLED sportswear chain JJB has called in the City watchdog after false rumours forced it to pull its £100m cash call to shareholders.

It has also vowed to press ahead with the rights issue which could be completed within days.

The Wigan-based group postponed the move last Friday after false allegations that chairman Sir David Jones, who lives near Ilkley, had received illicit payments resulted in a number of investors getting cold feet.

It is understood that Herbert Smith, JJB’s legal adviser, investigated the bank accounts of Sir David and no evidence of any payment was found.

Those close to the group said the smear was an attempt to wreck its fundraising plans, and JJB is today handing over a dossier to the Financial Services Authority detailing the allegations.

The FSA is expected to launch an investigation to find out who planted the false rumours, which also involved former JJB boss David Whelan and his daughter Jayne Sharpe.

In a statement to the stock market JJB said it was encouraged by the level of interest shown by investors during pre-marketing last week, with indications of interest in excess of three times the size of the proposed capital raising.

Referring to the speculation which swirled round the CIty last week it added: “The board has now concluded its investigation and found these rumours to be totally unfounded.

“The board is very concerned by the timing and concerted nature of these rumours and has passed on full details, with the results of its investigation, to the relevant regulatory authorities.

“The board remains fully supportive of Sir David Jones and committed to proceeding with a capital raising.”

It also emerged this weekend that former Woolworths boss Steve Johnson, is high up on the short list to fill the vacant position of chief executive of JJB.