Asda’s billionaire owners have denied setting up companies in Jersey for tax reasons as parliament’s inquiry into the brothers’ corporate structures continues.
Over the past few months, Mohsin and Zuber Issa have faced grillings from MPs over the supermarket giant’s complex structure and large debt pile.
Last month, Mohsin Issa was accused of having “misled” parliament after submitting a letter with inaccuracies over the offshore tax haven status of companies, inconsistencies in the stated purposes of various holding firms, and omissions concerning other businesses within the corporate structure.
However, in a letter to business and trade committee chair Liam Byrne, the co-owner said: “We would like to take this opportunity to confirm that no companies in the Asda ownership structure are incorporated in jurisdictions outside of England and Wales due to any ‘tax haven’ status,” The Telegraph reported.
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It continued: “We can further confirm that all of the companies are UK tax residents regardless of where they are incorporated, they each file UK corporation tax returns and pay UK corporation tax on profits in accordance with UK tax legislation.”
He blamed the previous correspondence that had suggested some Asda companies were incorporated in Jersey on an “administrative error,” adding “we do not believe that this error amounted to us having misled the committee”.
Byrne said in a letter to Mohsin Issa earlier this month: “The committee remains concerned about the complexity of the company structure within which Asda sits and is anxious to establish whether there are any further inaccuracies in the information that you have provided.”
Issa is set to provide evidence before the committee next Tuesday during a session exploring the use of private equity in retail.
It comes as the brothers’ use of debt has raised concerns over whether high borrowing costs could make it harder for Asda to bring down prices for its shoppers.
Last month, the Issa Brothers’ EG Group agreed to sell all 218 of its UK and Ireland KFC franchise restaurants to Yum! Brands’ KFC Division as part of the group’s “significant” deleveraging strategy to ensure it has a sustainable capital structure.
2 Comments. Leave new
The Issa Brothers built their forecourt business rapidly by leveraging and it worked very well for them. However, they are now massively over extended and need to reset this. A stronger base will enabled them to continue growth organically.
Asda bosses making big profits and have companies in Jersey despite there denial