Mohsin Issa admits inaccuracies in letter to MPs on Asda’s offshore ownership

Asda clarified that the purpose of the letter was to set out the relationship of the various companies

• Pramod Thomas
• 31 October, 2023

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By: Pramod Thomas

THE millionaire co-owner of Asda has admitted to inaccuracies in evidence provided to MPs about the complex offshore ownership structure of the company, a report said.

In response to a hearing in July before the House of Commons Business and Trade Committee, Mohsin Issa wrote a letter to clarify Asda’s corporate structure and also provided a list of 24 companies linked to the supermarket.

The Evening Standard said the letter had inaccuracies, including errors regarding the location of companies in offshore tax havens, discrepancies in the stated purposes of various holding companies and missing information about other businesses within the corporate structure.

The letter to MPs dated September 13 implied that three companies – Asda Group, Asda Stores, and McLagan Investments – are situated in Jersey, but they are actually based in the UK.

Further, it suggested that ‘Phantom Investments 2’ was intended for investing in Wagestream, a payment platform. However, the investment in the British fintech was actually made by a different entity within the structure, Bellis Phantom Holdco, before the shares were transferred out of it in November the previous year.

According to the report, the Issa brothers created the complex offshore ownership structure known as ‘Bellis’ for Asda after acquiring the supermarket in 2021.

The letter additionally outlined a firm named ‘Phantom Investments,’ aiming to invest in the credit card company Jaja, under the ultimate ownership of Bellis. However, it failed to acknowledge that Jaja has a subsidiary, Pana Finance, which, since the previous year, has gathered substantial debt funding, totalling hundreds of millions of pounds, through an offshore bond market based in Guernsey.

During the same period, Bellis committed to injecting tens of millions of pounds into Jaja, which had reached an agreement to offer credit cards for Asda, where customers receive £20 in spending money at the supermarket upon signing up.

Responding to the report, Asda clarified that the purpose of the letter was to set out the relationship of the various companies.

“Unfortunately, there was an error in the table laying out the group of companies, incorrectly suggesting that Asda Group, Asda Stores, and McLagan Investments were Jersey domiciled, when they have always been domiciled in the UK. All group companies are UK registered and pay tax in the UK in accordance with UK tax legislation,” Asda said in a statement.

In his letter, Issa also admitted that he mischaracterised the Bellis ownership structure.

“Without seeing it set out in front of me or with any prior indication that it was an area for discussion, I indicated on the day that this sounded correct. Upon reading the transcript, however, I realize that while the entities themselves are correct, the structure as described was inverted. This is important given the second point made on the day regarding our published consolidated financial statements,” he wrote in the letter.

“For clarity, Bellis Acquisition Company 3 Limited is the company that acquired the Asda business. This entity is in turn owned by Bellis Acquisition Company 2 Limited, which is owned by Bellis Acquisition Company plc. Bellis Acquisition Company plc is owned by Bellis Finco plc and is therefore the parent entity in the structure and as such prepares consolidated financial statements.”

Issa also rejected claims of withdrawing funds from the company and justified the supermarket’s complicated ownership structure.

He reiterated that “no dividends have been received by the shareholders since their acquisition of the business in 2021.”

He explained the payment was intended to settle inter-company loans.