Following an OFT investigation into the sports retail market, it has been announced that the Serious Fraud Office (SFO) has now begun its own investigations into JJB Sports and Sports Direct.
JJB Sports revealed that it had stated its concerns about possible cartel activity in its market to the OFT which in turn has been granted immunity from any financial penalty in the event that competition rules have been broken.
The investigation follows an approach made by JJB to the OFT on January 30, following the suspension of its then chief executive Chris Ronnie. JJB asked at that time;
“for immunity pursuant to the OFT’s leniency programme in relation to a suspected agreement or concerted practice to dampen competition in the sports retail market in the period from 8 June 2007 to 25 March 2009, being the period in which the former chief executive, Mr Christopher Ronnie, was employed by the company.”
JJB did not name any other individuals or companies in its statement today. However, there was frequent speculation during Ronnie’s tenure about the nature of his relationship with Sports Direct and its founder Mike Ashley for whom Ronnie formerly worked.
OFT officers visited JJB at its Wigan head office this morning. It may be “some years” before the OFT investigation is complete. The retailer said in a released statement
“that in the event that any subsequent immunity agreement, is withdrawn as a result of JJB’s non-compliance with the conditions or as a result of JJB’s evidence being materially undermined in particular circumstances, and an infringement decision is issued by the OFT, JJB “may be liable for a fine from the OFT of up to a maximum amount of 10% of the Group’s turnover”.
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