Asda’s new owners the Issa brothers have had the credit rating on their petrol station chain EG Group downgraded by Moody’s amid concerns about its financial governance and internal controls.

The Issa brothers, who snapped up Asda from Walmart in a £6.8bn deal earlier this month, have seen the credit rating on its petrol forecourt empire EG Group slashed to B3 from B2 by Moody’s, as first reported by The Times.

Moody’s said the downgrade was prompted by “limited progress in terms of financial reporting and governance, with regards to internal controls and board composition, relative to its substantially increased scale and complexity following large-scale M&A activity in the last two years”.

EG Group, which is owned by billionaire brothers Mohsin and Zuber Issa alongside private equity firm TDR Capital, has built up debts of £7.2bn in recent years due to rapid expansion of its petrol forecourt empire in Europe, the US and Australia.

Moody’s highlighted insufficient internal controls and the composition of EG’s board as key concerns prompting the ratings downgrade, which echoes the reasons that are understood to have motivated former auditor Deloitte to withdraw its services to the group with immediate notice earlier this month.

Deloitte’s former role as auditor for the group has since been taken by fellow Big Four auditor KPMG.

The Issa brothers are currently looking for a chairman and independent advice in a bid to bolster its board and quell growing corporate governance concerns. EG Group currently has no independent directors and its five directors comprise the Issa brothers, two TDR executives and its company secretary.

A spokeswoman for the EG Group said: “We strongly disagree with Moody’s decision which, despite recognition of EG’s inherent strengths and progress on several fronts, we believe doesn’t reflect the continued, wide-ranging investment in strengthening the business and the significant progress made over the last 12 months. We look forward to providing our investors with a further update on that progress, along with our record third quarter performance, next month.”