STRUGGLING sportswear firm JJB Sports was back on track with its £100m rights issue yesterday, after shrugging off a smear campaign apparently aimed at derailing the fundraising plans.

The retailer was set to push ahead with the rights issue before the weekend, but plans were put on hold to investigate false claims of illicit payments made to executive chairman Sir David Jones.

JJB, whose shares rose 2p closing at 34.75, is now expected to push ahead with the cash call on shareholders this week.

The company – which, alongside Newcastle United owner Mike Ashley’s Sports Direct, is being investigated for alleged price fixing – was “very concerned by the timing and concerted nature of these rumours” and passed on its investigation to the Financial Services Authority.

According to reports over the weekend, the speculation centred on Jayne Sharpe, the daughter of Wigan Athletic owner and former JJB chief executive David Whelan.

The unfounded rumours claimed Ms Sharpe had made payments into Sir David’s bank account, and were accompanied by details of her Swiss bank account and the JJB chairman’s and an apparent date of a transaction.

Any payment would have been hugely controversial, as Mr Whelan recently purchased JJB’s fitness clubs division – but Sir David’s bank accounts were scrutinised and no evidence of payments found.

JJB said it had seen initial levels of interest for three times the level of its planned fundraising from investors – although the size of the cash call exceeds the £87m market value of the business.

The sale of its health clubs formed part of a last-minute rescue deal in March, when JJB also outlined a strategy to distinguish itself from rivals Sports Direct and JD Sports Fashion with a “serious about sport” approach, concentrating on sports equipment.

But Seymour Pierce analyst Kate Heseltine downgraded JJB to sell yesterday, saying: “While we maintain our view that, over the longer term, there is an opening for the ‘serious about sports’ strategy, we believe competition is intensifying, both from rival Sports Direct, which has been strengthening its ranges, and from the online retailers, which currently service a large part of the sports equipment market.”

JJB and Sports Direct International are being investigated by the Serious Fraud Office (SFO) after a referral from the Office of Fair Trading (OFT) competition watchdog. The probe comes after JJB blew the whistle on alleged cartel activity.

Ms Heseltine said: “We have further concerns that the ongoing OFT and SFO investigations will distract management from the running of the business while the search still continues for a suitable chief executive.”