Wilko’s founding family should be pursued for the recovery of millions in dividends received before the retailer’s collapse in August, urged the chair of the Commons business and trade committee, emphasizing the need for UK regulators to “explore every option.”
Labour MP Liam Byrne made the call for regulatory action in the Commons yesterday after former Wilko chair and the granddaughter of its founder Lisa Wilkinson was grilled by cross-party committee over Wilko’s collapse, which followed £15m in payouts to family trusts over almost a decade.
Wilko’s collapsed into administration back in August led to 400 store closures and 12,000 job losses.
After its collapse the business left its pension fund nursing a £50m black hole, also owing about £625m in debts.
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In the House of Commons, Byrne said: “On Tuesday we finally had answers from Lisa Wilkinson about the mistakes that led to the collapse at that much-loved firm.”
“But Miss Wilkinson was not able to answer why 70% of the profits in the last four years were paid out in dividends to family trusts, while the deficit in the pension fund mounted, to now £50m.
On Tuesday we learned that 70% of the Wilko profits were paid out in dividends – while the pension fund was shortchanged.
Today I asked Ministers to look at how those dividends are repaid to Wilko’s pensioners 👇#wilko @GMB_union pic.twitter.com/OaDE5kZcbT
— Liam Byrne MP (@liambyrnemp) November 30, 2023
“Will the secretary of state ensure that regulators explore every option to claw back those dividends so that Wilko pensioners are not short-changed?” Byrne asked.
Wilkinson told the business and trade committee on Tuesday that the £15m in dividends paid out to shareholders in the past nine years were in a holding company owned by family trusts and tied up in investments that were difficult to access.
She claimed it would not have been possible to use that cash to help cut Wilko’s pension deficit because of a duty to shareholders.
She also denied having used the dividends to pay herself in a “personal capacity”, and said the family did not have enough funds “to make a difference” in the retailer’s eventual collapse.
“I don’t recognize that statement that we are one of the wealthiest families in the country and I don’t have assets to fill a £50m hole in the pension scheme,” she said.
In response to Byrne’s statement, business minister Kevin Hollinrake, said: “Clearly, the insolvency service is looking at this, is looking at the director’s conduct report from PricewaterhouseCoopers, the administrators.
She added that it was clear in the report so far “they have no evidence of director misconduct, but there’s further work ongoing.”
The Insolvency Service is due to meet the administrators PwC in January to look at the situation as it unfolds.
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