Mike Ashley’s company in price-fixing probe
Sep 11 2009 by Katy Simpson, The Journal
NEWCASTLE United owner Mike Ashley’s retail business Sports Direct is at the heart of a fraud investigation into alleged cartel activity.
The Serious Fraud Office (SFO) is investigating suspected criminal price-fixing and fraud at Sports Direct and JJB.
It follows months of secret examinations by the Office of Fair Trading (OFT), which referred the case to the SFO under the Fraud Act and the Enterprise Act.
The OFT announced yesterday that it executed “entry warrants” at two addresses as part of an investigation into anti-competitive conduct.
Between them Sports Direct and JJB have leading positions in the market for replica football shirts and sportswear – where sales are set to be boosted by England’s qualification for next year’s World Cup.
If found guilty, Sports Direct could face a fine of millions of pounds, and if Ashley himself is found to be involved he could face a jail sentence of up to five years and be slapped with an unlimited fine.
The OFT also has the power to disqualify the director of a company for up to 15 years.
JJB says the probe was launched after it approached the OFT about suspected cartel activity, just 10 days after the company suspended its former chief executive, Chris Ronnie.
The company claims to have blown the whistle in exchange for immunity from any possible financial penalties.
The announcement comes just weeks after the Competition Commission announced it was launching a full-blown investigation into the Magpies owner’s two-year buying spree of stores from rival JJB.
