Asda co-owner Mohsin Issa will be among witnesses at an evidence session next week where MPs plan to examine the use of private equity in the retail sector.

Private equity deals have been used to buy out several well-known British retailers in recent years, including Asda, which was bought by the Issa Brothers alongside private equity firm TDR Capital in 2020.

The Business and Trade Committee warned that private equity structures, which allow for greater control over businesses by using debt financing to buy them outright, are risky given that interest rate hikes have often left companies aquired this way with a heavy debt burden.

The move comes after Asda faced a grilling by MPs in July, when the Committee raised concerns about a lack of sustainability and transparency in regards to the supermarket’s private equity structure.

At the time, Asda provided further details about its business which were later contradicted by a report in the Evening Standard.

Asda was called to correct its record in writing, which it did in a letter dated 24 November that was made public on Friday.

In the letter, Asda addresses concerns about the purpose and domicile of all the individual entities that make up the ownership structure to which the supermarket belongs and provides an explanation to why the ownership of Wagestream shares has been moved around the Bellis Corporate Structure.

Following the publication of the letter, Nadine Houghton, national officer at trade union GMB, claimed that Asda bosses still have questions to answer about a "£2 billion hole" in their accounts and a further £2 billion declared as dividends.

“It's right MPs will be holding Asda bosses to account but without TDR capital – the shadowy private equity firm that also own Asda – the committee will not get the whole story," said Houghton. “TDR must not be allowed to duck scrutiny, they are co-owners of a vital part of our national infrastructure and one of the largest employers in the UK."

Retail Systems has reached out to TDR Capital for comment.

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