It's a solution: Mike Ashley accused the House of Fraser agreement

Mike Ashley has been accused of abusing the system after buying House of Fraser

Mike Ashley has been accused of abusing the system after he bought the Bust House of Fraser department store in a controversial £ 90 million deal that leaves 10,000 pension fund members in the lurch.

A dispute erupted last night over the fact that the offer of the owner of Newcastle United was favored by a greater offer of "white knight" rival billionaire retailer Philip Day that would have protected the pensioners.

The administrators of the EY accounting firm could face a government consultation after selling the 169-year chain to Ashley in an agreement that seems to put the interests of banks and bondholders above the workers' retirement savings.

Mike Ashley has been accused of abusing the system after buying House of Fraser

Mike Ashley has been accused of abusing the system after buying House of Fraser

Day, which owns brands such as The Edinburgh Woolen Mill and Peacocks, made two offers for House of Fraser. The first was presented on Thursday and the second, worth £ 100 million, was presented shortly after the retailer entered the administration early Friday.

Day also offered to take on the pension obligations of House of Fraser, but his proposals were rejected.

The Ashley & s Sports Direct empire is taking over the 59 UK stores of House of Fraser, its shares and its brand.

But the workers' retirement savings are directed to the lifeboat plan of the Pension Protection Fund, where they face cuts of up to 10 percent in their income. It is possible for an insurance company to accept the plan, but that may also involve reductions.

The scheme does not currently have a funding problem, but without a parent company to back it up, experts say a black hole of around £ 160 million would open.

The Ashley & s Sports Direct empire is taking over the 59 UK stores of House of Fraser, its shares and its brand name

The Ashley & s Sports Direct empire is taking over the 59 UK stores of House of Fraser, its shares and its brand name

The Ashley & s Sports Direct empire is taking over the 59 UK stores of House of Fraser, its shares and its brand name

Pension expert John Ralfe said: "For people who have not yet retired, pensions will be reduced by up to 10%, and everyone, including those already retired, will receive less generous annual increases in inflation."

An EY spokesman said Ashley's offer was "the only agreement on the table" when he was named administrator on Friday morning. But sources said that Day's offers had been rejected at the time by banks and bondholders who were owed money, probably because according to their proposals, the pensioners would have advanced in the line of payments.

EY confirmed that Ashley's agreement was a "pre-package insolvency", a controversial process in which a buyer is aligned in advance and buyers can get rid of a company's pension obligations.

Sir Vince Cable said Ashley's agreement "looks like an abuse of the pre-packaged system"

Sir Vince Cable said Ashley's agreement "looks like an abuse of the pre-packaged system"

Sir Vince Cable said Ashley's agreement "looks like an abuse of the pre-packaged system"

Sir Vince Cable, the Liberal Democrat leader, ordered an investigation into the previous packages while he was business secretary. He said that Ashley's deal "looks like an abuse of the pre-packing system" and called for an investigation.

He said: "There must be an investigation by the Department of Business that will lead to a change in the law. Until the pre-packing process is reformed, there are open goals that people can exploit. "

Ashley has promised to turn House of Fraser into & # 39; Harrods of the High Street & # 39; He is ready for long conversations tomorrow as part of the delivery.

Sports Direct did not comment on the closing of stores or how many of the 16,000 House of Fraser jobs will be lost. It is likely that Ashley wants to convert some stores to Sports Direct and Franelas, a fashion chain he owns.

Sports Direct is also expected to renegotiate rents at stores, some of which are more than 40 years old. That job could fall to Michael Murray, the 28-year-old boyfriend of Ashley's daughter.

Sports Direct refused to comment more.

Buyers at the Fraser House at the Gateshead Metro Center, the store closest to St James's Park, where the Newcastle United team from Newcastle played yesterday afternoon, expressed mixed feelings.

Jill Brown, 45, said: "If I were one of your employees, I would be very concerned, knowing what we do with Sports Direct and its zero-hour contract and the bad conditions, and you will not want it to fail either.

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