- Wednesday, November 29, 2023
Issa explained that the £1.8bn payment was intended to settle inter-company loans
By: Pramod Thomas
THE billionaire co-owner of Asda has rejected claims of withdrawing funds from the company, and also justified the supermarket’s complicated ownership structure, reported The Telegraph.
Mohsin Issa’s rebuttal comes in response to allegations that he and his brother Zuber had paid themselves dividends from Asda following their £6.8 billion takeover of the company in 2021.
It was part of his response to the House of Commons Business and Trade Committee after a tense hearing in July.
Labour’s Darren Jones, the former chair of the committee, had written to Issa in late August, seeking further clarification after he was accused of evading questions from MPs.
Jones pointed out a £1.8bn dividend that was disbursed by a holding company within Asda’s corporate structure last year, which contradicted Issa’s earlier statements.
During the contentious hearing, Issa had been asked about dividends and claimed that no dividends were distributed. However, available accounts revealed a £1.8bn “dividend” to Bellis Acquisition Co PLC.
In a letter made public by the Business and Trade Committee on Tuesday (17), Issa reiterated that “no dividends have been received by the shareholders since their acquisition of the business in 2021.”
He explained that the £1.8bn payment was intended to settle inter-company loans.
The scrutiny surrounding dividends has coincided with questions about Asda’s intricate ownership structure, which comprises 24 companies, some of which are registered in Jersey, and others in England and Wales.
In Jones’s letter to Asda, he expressed concerns that the complex company structure and financing decisions could limit Asda’s ability to address the cost-of-living challenges faced by its customers.
In response, Issa clarified that it is not unusual for a business of Asda’s size to have such a complex structure. He emphasised that this structure was designed to facilitate lending practices and support future takeover endeavours.
MPs had also questioned about interest-free loans purportedly used to finance the acquisition of private jets.
Issa pointed out that EG Group, the petrol forecourt empire owned by the Issa brothers, had publicly disclosed these loans in its financial reports, and the EG Group’s board of directors had approved the arrangement.
In his written response, Issa stated that he is a private individual who does not seek the limelight, nor does he feel particularly comfortable in it.
Asda has declined to provide additional comments on this matter.
