Asda execs have committed to sharing secret accounts for the offshore companies that own the supermarket after coming under pressure from MPs.
The firm’s CFO, Michael Gleeson, told Parliament’s Business and Trade Committee he would hand over the accounts for the Jersey-based entities forming the ownership structure known as Bellis, which are not required to publish annual reports under Jersey law.
Gleeson denied that the companies were based in Jersey to avoid corporation tax, but said they could help Asda’s owners, which include the Issa brothers, to avoid stamp duty charges in the event of a future sale.
MPs on the committee queried the complex corporate structure behind Asda, as well as the firm’s billion-pound debt burden and the motivation for naming some of its intermediate holding companies “Phantom Investments.”
Labour MP Charlotte Nichols said: “You don’t believe it’s bad PR when you’re asking us to trust the business to have a section of your investment structure that is named something that is synonymous with lies, deception and deceit in calling it ‘Phantom?’”
Asda company secretary Helen Selby said: “I see it as a word. I don’t look beyond it. I wouldn’t not choose it.”
Gleeson conceded that Asda would face an extra £30 million in interest payments after a portion of its debts were set to be refinanced at higher rates next year, but said the supermarket’s overall debt burden had come down as a multiple of its income.
Mohsin Issa said he was committed to expanding Asda’s convenience store estate, adding he was “in it for the long haul.”
It comes after Mohsin Issa was warned by the committee of a ‘contempt of Parliament’ following the Standard’s discovery he had submitted error-strewn evidence to MPs.
You don’t believe it’s bad PR when you’re asking us to trust the business to have a section of your investment structure that is named something that is synonymous with lies, deception and deceit in calling it ‘Phantom?’
Chair Liam Byrne MP said in a letter: "I was taken aback to read in the Evening Standard of 27 October that Asda has admitted your letter contained 'multiple inaccuracies'.
"I am disappointed to have to point out to you that submitting inaccurate information to a Select Committee is tantamount to misleading the House of Commons and this is prima facie a contempt of Parliament, which is a very serious matter.”
In October, an Evening Standard analysis revealed that Mohsin Issa's letter contained multiple inaccuracies as to whether companies were located in offshore tax havens, as well as inconsistencies as to the expressed purpose of different holding companies and omissions on other businesses within the corporate structure.
Mohsin Issa has since apologised to the committee and put the mistakes down to “an administrative error.”
He added: “No companies in the Asda ownership structure…are incorporated in jurisdictions outside of England and Wales due to any “tax haven” status and we can further confirm that all of the companies…are UK tax resident regardless of where they are incorporated.”
