Bury-based FTSE 100 retailer JD Sports Fashion Plc issued a stock exchange statement on Monday refuting any “corporate governance breaches” after newspaper reports of a meeting between its executive chairman Peter Cowgill and Barry Bown, executive chairman of Footasylum.
The UK’s Competition and Markets Authority (CMA) said last Thursday it has instructed JD Sports to sell Rochdale-based Footasylum after a second investigation “identified competition concerns.”
JD Sports said on Thursday “the decision to prohibit the acquisition defies logic” and that it is studying the report in detail and “will carefully consider its options accordingly.”
On Monday, JD Sports said in a stock exchange statement: “The board of JD Sports Fashion Plc notes the contents of articles published over the weekend in The Sunday Times.
“For the sake of balance, the board feels that the following responses are relevant and important to note …
“Peter Cowgill has known Barry Bown on a business and personal basis for over 25 years.
“As a result, it is not unusual, or in any way suspicious or illegitimate, for them to meet from time to time, including in relation to the ongoing review by the Competition and Markets Authority (CMA) of JD’s acquisition of Footasylum Limited.
“The Sunday Times omitted to report on the positive obligation that JD has under the terms of the Interim Enforcement Order to take all reasonable steps to encourage key staff of the Footasylum business (which includes Barry Bown) to remain with the business.
“The CMA has already been fully apprised of the content of the meeting on 5th July 2021 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.
“It is disappointing that the Sunday Times has not reported in a more balanced way on the highly irregular and potentially illegal covert surveillance undertaken by a third party for their own interests.
“JD hopes that a regulator, tasked with acting in the wider public interest, is able to more critically regard the actions of the third party for what they are.
“Any suggestions with regard to corporate governance breaches are totally refuted.
“JD’s stakeholders are very aware that the chairman and the board treat governance matters extremely seriously and with the utmost transparency.
“As demonstrated at the recent capital markets event for investors, the success of the business is underpinned by its core values and integrity.
“The board has previously committed to divide the roles of chairman and chief executive before the next Annual General Meeting and we can confirm that this process is progressing with a view to optimising the outcome for all stakeholders.
“Strengthening of the board is also well advanced with one new independent non-executive director appointed in September 2021 and the appointment of a further independent non-executive director imminent.”