The former finance director of the Bannatyne Group, Christopher Watson, has been jailed after admitting to defrauding the company out of nearly £8m over a six-year period.

The 46-year-old took £7,974,221 from July 2008 to July 2014, which he used to pay off millions of pounds of gambling debts and buy several properties.

Appearing at Teesside Crown Court, Watson was sentenced to four years and eight months in prison. Judge Howard Crowson said: "This was an abuse of position, of power and trust and responsibility. It was clearly fraudulent activity over a sustained period of time."

Duncan Bannatyne, who had previously said he felt ‘betrayed’, did not appear in court, but issued a statement which was read out by the prosecution. It said he was "absolutely shocked and appalled at the callous actions of Mr Watson," adding that he had previously looked into increasing the pay of some staff above the minimum wage, only to be told by Watson that “cashflow would not allow it".

Recently-published accounts show Bannatyne Fitness profits dropped from £10m to £3m in the past year. The accounts make clear what is believed to be the cause, noting: “During the year, the directors identified that misappropriation of the company and the group’s assets had been occurring for a number of years by former employees.”

Bannatyne Fitness – the health club chain started by Bannatyne in 1997 – now comprises more than 60 health clubs across the UK, with many also featuring a Bannatyne Spa.

Bannatyne has said that changes to his top team, which have included the appointment of Justin Musgrove as Bannatyne Group MD and Ken Campling as finance director of Bannatyne Fitness, mean that the business is now in “great shape” to move forward and expand.