UK regulators should “explore every option” to claw back millions of pounds in dividends paid to Wilko’s founding family before the budget retailer’s collapse in August, the chair of the Commons business and trade committee has said.
The Labour MP Liam Byrne made the comments days after Lisa Wilkinson, the company’s former chair and granddaughter of its founder, was grilled by the cross-party committee over Wilko’s failure, which followed £15m in payouts to the founding family trusts in the past nine years.
Wilko’s failure this summer resulted in 400 store closures and 12,000 job losses, and left its pension fund nursing a £50m black hole. It also owed about £625m in debts.
“On Tuesday we finally had answers from Lisa Wilkinson about the mistakes that led to the collapse at that much-loved firm”, Byrne said in the House of Commons on Thursday. “But Miss Wilkinson was not able to answer why 70% of the profits in the last four years were paid out in dividends to family trusts, while the deficit in the pension fund mounted, to now £50m.
“Will the secretary of state ensure that regulators explore every option to claw back those dividends so that Wilko pensioners are not short-changed?” Byrne urged.
On Tuesday we learned that 70% of the Wilko profits were paid out in dividends – while the pension fund was shortchanged.
Today I asked Ministers to look at how those dividends are repaid to Wilko’s pensioners 👇#wilko @GMB_union pic.twitter.com/OaDE5kZcbT
— Liam Byrne MP (@liambyrnemp) November 30, 2023
Responding to Byrne’s comments, the business minister, Kevin Hollinrake, said: “Clearly, the insolvency service is looking at this, is looking at the director’s conduct report from PricewaterhouseCoopers, the administrators. It has been clear in that report so far they have no evidence of director misconduct, but there’s further work ongoing. The Insolvency Service is due to meet the administrators PricewaterhouseCoopers in January and we’ll look at that situation as it unfolds.”
Wilkinson told the business and trade committee on Tuesday that the £15m in dividends paid out to shareholders in the past nine years were in a holding company owned by family trusts and tied up in investments that were difficult to access. She claimed it would not have been possible to use that cash to help cut Wilko’s pension deficit because of a duty to shareholders.
She also denied having used the dividends to pay herself in a “personal capacity”, and said the family did not have enough funds “to make a difference” in the retailer’s eventual collapse. “I don’t recognise that statement that we are one of the wealthiest families in the country and I don’t have assets to fill a £50m hole in the pension scheme,” she said.
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The GMB union, which represents thousands of former Wilko workers, separately told MPs on the committee earlier this week that Wilkinson “bears a significant amount of responsibility” for the chain’s collapse, citing “weak leadership and a failure to adapt to the changing market”.
