Jailed sportswear boss Chris Ronnie faces an even bleaker New Year behind bars since the Serious Fraud Office has begun confiscation proceedings to forensically examine his career over many years.
The executive was convicted of a ‘very greedy fraud’ last month and jailed before Christmas for four years, after a jury unanimously found him guilty of taking £1 million in backhanders, then trying to cover up his crime. But though the jail door has slammed behind him, his troubles are far from over.
The SFO has now launched a new action against Ronnie and is demanding his lawyers hand over a list of all his assets and details of his financial transactions by January 16. The investigators are acting under the Proceeds of Crime Act, which gives them extra powers in cases like his.
The SFO could call for a ‘criminal lifestyle’ order against Ronnie as he has been convicted of three separate frauds. This would let it investigate his activities six years from the date he was charged, though he can challenge this. This period would include his time at JJB Sports but also include his final months at his former employer, Sports Direct, run by Newcastle United owner Mike Ashley.
Ronnie was found guilty of three counts of fraud involving six-figure sums. Two relate to the £2 million purchase of defunct sports brand Travelfox, first raised as a concern in The Mail on Sunday in July 2009, two months before the SFO’s investigation began.
The third relates to supply of excess stock from the Old Navy store chain. Judge Nicholas Loraine-Smith said that within months of arriving at JJB, Ronnie was ‘grossly abusing’ his role with conduct that was ‘dishonest in the extreme’. He said: ‘This was a flagrant and disgraceful breach of your duty as a chief executive of a public limited company.
‘I’m unable to see any sign of remorse or even embarrassment about what you have done.’
Ronnie left his previous job at Mike Ashley’s Sports Direct in November 2006, where he held more than a dozen director roles at subsidiaries. But months later in June 2007 he emerged with £190 million backing from Icelandic banks to acquire 29 per cent of JJB Sports.
JJB had begun a fightback against the rapidly growing Sports Direct, and had reversed a sales decline. Ronnie’s shareholding drew surprise and concern from the start, not least because of his relationship with his former employer. But Ronnie gave written assurances there was no conflict of interest and two months later was promoted to chief executive.
The share price was 215p, valuing the firm at about £500 million. By December 2008, when Ronnie threw his works Christmas party in Altrincham, Cheshire, the share price was close to 2p. The plunge followed a series of decisions made by Ronnie, with the apparent knowledge and support of other directors.
His sudden closure of 72 stores in April 2008 was pivotal. Ronnie and his chairman Roger Lane-Smith said they were unprofitable. The Mail on Sunday printed evidence to the contrary, later backed up by auditors.
Ronnie was busy visiting stores in a £4 million Agusta 109 helicopter owned by JJB. He was also travelling to Sarasota, Florida, to find a luxury holiday home to buy with money from his side deals. He also had a £1.5 million gated home in Wilmslow, Cheshire.
In September 2009, the company issued a warning that profits would be far lower than expected. The chain had continued to pay rent on many of the stores that were no longer trading. Auditors alerted the board of concerns, including the transfer of 31 stores to arch-rival Sports Direct. They were also alarmed that Ronnie had not carried out due diligence on acquisitions.
Ronnie’s defence lawyers argued that the financial crash of 2008 caught Ronnie unawares, and they painted a picture of a man who was inexperienced as a chief executive and over-confident.
His tenure ushered in a decline from which JJB Sports never recovered. In September 2012, shares in JJB were suspended and the firm called in administrators.
The following month, it was announced that Sports Direct had purchased part of the business, including 20 stores, the brand and its website for £24 million.
JJB’s fate may have been sealed, but for Ronnie, the story of his long fall from grace at the top of one of the country’s best known high street brands is not over yet.
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