JJB sports entered into insolvency in 2012 after a number of failed attempts at restructuring the business, leaving unsecured creditors an estimated £212.2million out of pocket and over 10,000 staff out of a job.
Christopher Ronnie, 52, who was in charge of the sports retailer between August 2007 and March 2009, has now been jailed for 4 years at Southwark Crown Court for accepting more than £1million in bungs from suppliers. He has also been disqualified from acting as a company director for 8 years.
Guilty of a “very greedy” fraud
The former JJB boss was found guilty of fraud for three six-figure cash payments he received from suppliers during his tenure as chief executive. Over a period of nine months, Mr Ronnie benefitted to the tune of just under £1million.
The payments, which Mr Ronnie partly used to buy a property in Florida, were not disclosed to the company’s board of directors as they should have been. Instead, Ronnie went to great lengths to hide the payments from his colleagues.
Ronnie received the payments, £650,000 from supplier Performance Brands, £197,000 from Fashion and Sport and a further £134,000 from Fashion and Sport, in 2008. At the time he was £11million in debt to the Icelandic bank Kaupthing Singer Friedlander and clearly insolvent.
Mr Ronnie had raised £190million to fund his 30 percent stake in the sports retailer. As the financial crash took hold, the bank pursued Mr Ronnie for the £11million he owed them. However, they soon found the information relating to his assets and liabilities when they agreed the loan had been falsified.
The attempted cover up
Christopher Ronnie’s business partners David Ball, 54, and David Barrington, 52, who worked for the firms that made the payments to Ronnie, were both handed an 18-month custodial sentence for their part in helping him cover his tracks.
Messrs Ball and Barrington compounded their misfeasance by covering up emails relating to the payments and asked a computer engineer to wipe any trace of them from the company’s computers. The engineer was so concerned by the request that he contacted the Serious Fraud Office.
The Serious Fraud Office then began an investigation which has taken five years to complete. The three cases have cost the British taxpayer £630,000, with Mr Ronnie’s case racking up a £500,000 bill.
A flagrant and disgraceful breach
Judge Nicholas Loraine-Smith said Mr Ronnie’s actions at the helm of JJB Sports had constituted a “flagrant and disgraceful breach” of his duty as the boss of a public company.
He added: “You had taken up a position which brought with it enormous responsibility to the employees and shareholders, but within months you were grossly abusing that position by embarking upon a course of conduct which was dishonest in the extreme.
“I’m unable to see any sign of remorse or even embarrassment about what you have done. This was a particularly vulnerable period in the company’s history prior to its collapse and the part you played was a flagrant and disgraceful breach of your duty as the CEO of a public limited company.”
Attempts to derail the investigation
Welcoming the Judge’s decision, David Green, director of the Serious Fraud Office, said: “These defendants contrived to hide information regarding their dealings from both JJB’s board of directors and the Serious Fraud Office once its investigation began.
“That the investigation resulted in these convictions, despite such attempts to derail it, reflects our determination in tackling complex and elaborate fraud.”
Christopher Ronnie, David Ball and David Barrington must serve at least half of their sentences. Confiscation proceedings are expected to be launched to claw back some of the costs of the case.