Michelle ThompsonMoney from the founding family should be retrieved, according to a Commons committee, “so pensioners are not short-changed.”
The chair of the Commons business and commerce committee has stated that UK regulators should “explore every option” to reclaim millions of pounds in profits given to Wilko’s founding family prior to the low-cost retailer’s collapse in August.
Days after Lisa Wilkinson, the business’s former chair and founder’s granddaughter, was questioned by a cross-party committee about Wilko’s failure—which came after the company had paid out £15 million to the original family trusts over the previous nine years—Labour MP Liam Byrne made the remarks.
Due to Wilko’s collapse this summer, 12,000 jobs were lost, 400 stores were closed, and its pension fund was left with a £50 million hole in it. Its debts also totaled over £625m.
Byrne stated in the House of Commons on Thursday, “On Tuesday we finally had answers from Lisa Wilkinson about the mistakes that led to the collapse at that much-loved firm.” However, Miss Wilkinson was unable to provide an explanation for why family trusts received dividend payments totaling 70% of the profits during the previous four years, even while the pension fund’s deficit grew to £50 million.
“In order to prevent Wilko pensioners from being taken advantage of, will the secretary of state see to it that regulators investigate every avenue to recover those dividends?” Byrne pleaded.
“Clearly, the insolvency service is looking at this, is looking at the director’s conduct report from PricewaterhouseCoopers, the administrators,” said business minister Kevin Hollinrake in response to Byrne’s remarks. The study made it apparent that there is currently no proof of director malfeasance, but more investigation is being done. PricewaterhouseCoopers, the administrators, are scheduled to meet with the Insolvency Service in January. We will monitor the issue as it develops.
On Tuesday, Wilkinson informed the business and trade committee that the £15 million in dividends that had been distributed to shareholders over the previous nine years had been held in a holding company that was controlled by family trusts and involved investments that were hard to get access to. She said that because of a duty to shareholders, it would not have been feasible to utilize that money to help reduce Wilko’s pension deficit.
Additionally, she denied using the dividends to support herself in a “personal capacity” and asserted that the family lacked the resources “to make a difference” in the final demise of the retailer. “I don’t have assets to fill a £50 million hole in the pension plan, and we are one of the wealthiest families in the nation,” the woman remarked.
Wilkinson “bears a significant amount of responsibility” for the chain’s demise, the GMB union, which represents hundreds of former Wilko employees, separately told MPs on the committee earlier this week, blaming “weak leadership and a failure to adapt to the changing market.”
