After coming under pressure from MPs, Asda executives have pledged to disclose the secret accounts of the offshore companies that own the supermarket.
The company’s chief financial officer, Michael Gleeson, told Parliament’s Business and Trade Committee that he would hand over the accounts of the Jersey-based companies that make up the ownership structure known as Bellis, which are not required to publish annual reports under Jersey Islands 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, avoid stamp duty in the event of a future sale.
Committee members questioned Asda’s complex corporate structure, the group’s billions in debt and the motivation for describing some of its intermediate holding companies as “phantom investments”.
Labour MP Charlotte Nichols said: “You don’t think it’s bad PR to ask us to trust the company that part of your investment structure has a name synonymous with lies, deceit and fraud by calling it ‘Phantom’?”
Helen Selby, company secretary at Asda, said: “I see it as a word. I don’t see beyond that. I wouldn’t oppose it.”
While Gleeson acknowledged that Asda will have to make additional interest payments of £30 million as part of its debt will have to be refinanced at higher interest rates next year, the supermarket’s overall debt burden has fallen by several times its revenue.
Mohsin Issa said he was determined to expand Asda’s convenience store offering, adding he was “in it for the long haul”.
Mohsin Issa had previously been warned by the committee for “contempt of Parliament” after the Standard found that he had presented faulty evidence to MPs.
You don’t think it’s bad PR when you ask us to trust the company to give a section of your investment structure a name that is synonymous with lies, deception and fraud by calling it ‘Phantom’?
Representative Charlotte Nichols
Chairman Liam Byrne MP said in a letter: “I was surprised to read in the Evening Standard of 27 October that Asda had admitted that your letter contained ‘several inaccuracies’.”
“I regret to advise you that providing inaccurate information to a select committee is tantamount to misleading the House of Commons and, on its face, is contempt of Parliament, which is a very serious matter.”
In October, an analysis by the Evening Standard revealed that Mohsin Issa’s letter contained numerous inaccuracies regarding whether the companies were based in offshore tax havens, as well as discrepancies regarding the stated purpose of the various holding companies, and failed to include information about other companies within the corporate structure.
Mohsin Issa has since apologized to the committee and attributed the errors to “an administrative error.”
He added: “None of the companies in Asda’s ownership structure … are incorporated in jurisdictions outside England and Wales due to a ‘tax haven’ status and we can further confirm that all companies … are tax resident in the UK regardless of where they are incorporated.”
