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Borrowed from his rivals to ‘hide debts’
Markets Act 2000, and one of using a false instrument, contrary to the Forgery and Counterfeiting Act 1981.
Yesterday (Wednesday), prosecutor Miranda Moore QC said Sir David lied about both loans to the board of JJB Sports and, as result, the company put out misleading statements at a time when it was trying to raise £100 million on the financial markets.
She said the businessman forged a bank statement with the help of his son, Stuart, who is also on trial, in October 2009.
This was when newspapers were about to run a story suggesting Mr Whelan had paid £1.5 million to Sir David in relation to a deal Mr Whelan had done to take over gyms from JJB.
This story was “absolute rubbish” Miss Moore told the court, but JJB was concerned about adverse publicity as it prepared for flotation.
Miss Moore said these concerns were exacerbated when the Daily Telegraph said had one of Sir David’s bank statements detailing the payment to him from Mr Whelan’s daughter for £1.5 million.
The prosecutor described how, in response, Sir David produced a bank statement of his own which made no mention of this transaction and convinced the board that the Telegraph’s document was a forgery.
But, she said, it was the defendant who had produced the fake.
Miss Moore said: “It was a forgery. It was a very good forgery. It fooled absolutely everyone.”
She told the jury of seven women and five men: “Why produce a forgery to con your board of directors, your own advisers, your own PR people?” And she said: “The company needed this flotation. If it hadn’t had the money, the view of the company was that it would have failed by Christmas.”
The prosecutor said Mr Ashley was an “aggressive competitor” of JJB Sports at the time and that “it is possible he wouldn’t have been unhappy if a bit of muckraking” had derailed the firm’s attempts to raise capital.
She told the court the company secured the £100 million it needed because the market was satisfied they were a good bet.
As part of this flotation, Sir David secured a £100,000 bonus, Miss Moore added.
The court heard as executive chairman he had a basic salary of £378,000 plus six-figure performance-related bonuses.
Miss Moore also told the court that when he first joined the board as a non-executive director in 2007, Sir David had assets of around £29 million.
The prosecutor said: “It was a lucrative position. There was a bonus for a successful floatation and there was a lot of money being risked by people investing in the company against a background of a (statement to the stock exchange) which turned out to contain a direct lie.”
But she told the jury there was no suggestion this case was about anyone “receiving bungs from anyone”.
“That’s not the allegation here,” she said.
The prosecutor said Sir David never told the truth about the loan from Mr Whelan from the moment he took the money in May 2009, to when he left the company in January 2010.