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Mike Ashley’s Frasers Group has reportedly sent a letter to parliament urging them to launch an independent investigation into Debenhams’ collapse in 2019.
According to Sky News, which reports it has seen the letter from Frasers CFO Chris Wootton, the letter claims that the Debenhams board was culpable for its collapse after it paid a £35m dividend in July 2018 – under a year before it first entered administration.
In the letter sent to the chairs of two Commons select committees, Wootton claims that any investigation is in the “public interest” and that so far regulators and politicians have failed to properly investigate Debenhams’ collapse.
According to the publication it reads: “For several years we have been trying to have this matter investigated by regulators (e.g. the FCA) and select committees (BEIS) but people have passed the buck – we cannot understand it…
“The Official Receiver is now in office as liquidator, and he is considering whether an insolvency practitioner should be appointed who, if properly funded, could investigate the history of Debenhams’ failure.”
It continued: “To our mind the answer to that question is unequivocally ‘yes’ – it is obviously in the public interest to do so. However, yet again, we see no action yet as the Official Receiver is holding neutral (when he should be investigating).”
The news comes after it was revealed last month that Ashley had reportedly gone to the High Court to set aside a settlement agreed with Debenhams and its administrators earlier this year.
According to the Times, the retail tycoon intends to “kickstart investigations” into the department store’s directors and advisors following its collapse.
If accepted, the High Court application would undo the settlement that took place with Debenhams’ administrators at FRP Advisory, where Ashleys’ Frasers Group agreed not to pursue legal action.
The original dispute arose when Debenhams filed for administration in 2019, as his near 30% stake in the firm was lost as a consortium of lenders took control of the business via a pre-pack administration.
In turn, Ashley agreed to settle for a purchase deal for the fixtures and fittings in the group’s empty stores.
The pre-pack administration cost Ashley a reported £150m, with appointed administrators FTI Consulting claiming at the time that the deal was in the best interests of Debenhams’ creditors and not subject to conflicts of interest.
While Judge Daniel Schaffer ruled that the circumstances of the firm’s collapse should be investigated by the official receiver, the Times reported that the current agreement between Ashley and FRP blocks this from happening.
