8th Nov 2021 08:49
(Alliance News) - JD Sports Fashion PLC on Monday responded to a Sunday Times report, saying it "totally refuted" any breaches in corporate governance.
Shares in the retailer were down 1.9% in London on Monday morning at 1,100.00 pence each.
The newspaper said that JD Sports had launched an investigation into who had covertly filmed Chair & Chief Executive Peter Cowgill meeting his counterpart at footwear retailer Footasylum, Barry Bown, in a possible breach of competition rules.
Last week, the UK Competition & Markets Authority ordered JD Sports to sell Footasylum. It was the latest twist in a protracted and frustrating process for JD Sports, which purchased the footwear retailer back in March 2019 for GBP90.1 million. That July, however, the UK Competition & Markets Authority opened a probe on the tie-up.
The CMA on Thursday last week ruled the deal "could lead to a substantial reduction in competition and a worse deal for Footasylum's customers".
JD Sports is "by far and away" the closest alternative for Footasylum shoppers, the CMA said.
JD Sports lashed out at the decision. The FTSE 100 company called the CMA's decision "extreme and unprecedented", saying it "defies logic". It said it will study the regulator's Footasylum report and consider its options.
On Monday, JD highlighted that Cowgill has known Bown "on a business and personal basis for over 25 years".
As a result, JD said it was not unusual, "or in any way suspicious or illegitimate, for the pair to meet from time to time", including in relation to the ongoing review by the CMA of JD's acquisition of Footasylum.
JD noted it has an obligation under the terms of the interim enforcement order from the CMA to encourage key staff of the Footasylum business - which includes Bown - to remain with the business.
"The CMA has already been fully apprised of the content of the meeting on July 5 and the reasons for it, and JD firmly believes that its actions in participating in this meeting do not amount to wrongdoing or a breach of the order and does not see how it would be reasonable to accuse JD of such," the retailer said.
JD Sports said it treats governance matters "extremely seriously" and "with the utmost transparency".
The retailer said its plan to split Cowgill's role of chair and chief executive before the next annual general meeting is progressing, while an additional non-executive director appointment is imminent.
By Paul McGowan; [email protected]
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