Asda co-owners the Issa brothers have denied taking money out of the supermarket as the pair defended the the retailer’s complex ownership structure.
Mohsin Issa’s denial was part of a response to the House of Commons Business and Trade Committee following a hearing back in July.
The Telegraph reports that Issa countered allegations suggesting that he and his brother Zuber distributed dividends to themselves from Asda following their £6.8bn acquisition in 2021.
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In late August, Darren Jones, the former chair of the committee, sent a letter to Issa, seeking additional information after he was accused of stonewalling MPs.
Jones pointed out a discrepancy in Issa’s testimony, emphasizing that a holding company within the Asda organization distributed a £1.8bn dividend last year, his previous statements.
He wrote: “During the evidence session, I asked about dividends. You said that no dividends had been paid out. But from the available accounts, we can see that a ‘dividend’ of £1.8bn was made to Bellis Acquisition Co PLC.”
But in a letter published by the Business and Trade Committee on Tuesday, Issa once again said that “no dividends have been received by the shareholders since their acquisition of the business in 2021”.
He said the £1.8bn payment was made to settle intercompany loans.
Scrutiny of dividends has aligned with inquiries into Asda’s ownership structure, which comprises a total of 24 businesses. These entities are a combination of those incorporated in Jersey and others in England and Wales.
In his letter to Asda, Mr Jones said: “The committee has concerns that the complex company structure within which Asda sits, and associated decisions on financing, may restrict your ability to help meet cost-of-living pressures on your customers.”
In response, the Asda co-owner said it was not uncommon for a business of its size to have such a complex structure.
Issa said the business was set up this way to enable smooth lending practices and fuel future takeover activity.
MPs also asked for more detail about interest-free loans allegedly provided to fund the purchase of private jets.
Issa said EG Group, the petrol forecourt empire owned by the two brothers, had publicly disclosed the loans in its accounts: “The board of directors of the EG Group are aware of, and approved, this arrangement.”
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