Yahoo Finance JD Sports says covert filming of chairman is ‘highly irregular’
JD Sports has described the covert filming of its executive chairman, Peter Cowgill, as “highly irregular and potentially illegal” and denied any wrongdoing after the footage captured a meeting between the businessman and his counterpart at Footasylum, the trainer retailer.
JD bought Footasylum for £90m in 2019, but the deal became the subject of a review by the competition watchdog. Last week, the Competition and Markets Authority ordered JD to sell Footasylum, after concluding the takeover had reduced competition for high street shoppers.
The video recording, which has been seen by the Sunday Times, has sparked a fresh investigation by the competition regulator. The footage reportedly shows Cowgill sitting in his car with Barry Bown, the executive chairman of Footasylum, in a car park near Bury in Greater Manchester in July this year. There is no audio on the video.
Related: JD Sports furious as regulator orders it to sell Footasylum
During its review, the CMA had instructed that while meetings between bosses of the two companies were allowed, confidential or commercially sensitive information should not be shared.
But in a statement released on Monday morning, JD Sports said Cowgill and Bown had known each other on a “business and personal basis for 25 years” and that that it was “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”.
“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 said.
The sportswear company hit out at what it claimed was “highly irregular and potentially illegal covert surveillance undertaken by a third party for their own interests”.
“Any suggestions with regard to corporate governance breaches are totally refuted,” it added.
However, the competition regulator is understood to have seen the footage of the bosses’ meeting, and is in the process of investigating whether it constitutes a breach of the interim order.
“These rules are put in place to protect consumers and other businesses operating in that market as we investigate a merger. We take compliance very seriously and thoroughly investigate any potential breaches,” a CMA spokesperson said. “Where there is clear evidence that a breach has occurred we do not hesitate to take action.”
JD said it had already notified the CMA about the discussions of the July meeting, and its purpose. A person with knowledge of the matter suggested that the information was passed on before the Sunday Times report was released.
JD Sports said it was still committed to dividing its executive chairman role into two positions – chairman and chief executive – before the company’s next annual general meeting in 2022 and was strengthening the board, including with a new independent non-executive director appointed in September. A second non-executive appointment was imminent, the retailer added.
