EMBATTLED Scottish Labour leadership candidate Anas Sarwar yesterday relinquished the shares he held in his family’s firm after a Sunday Herald investigation into working practices at the company.

Sarwar agreed to dispose of his stake, believed to be worth around £4.8m, after this newspaper revealed that some staff are paid below the real living wage and the MSP admitted there is no trade union recognition at the company.

A campaign spokesman said Sarwar had signed a “discretionary trust” and the "beneficiaries" will be his three young children, who will not access the assets until they are adults.

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In the leadership contest Sarwar is up against Holyrood left-winger Richard Leonard, but he has faced a barrage of questions over employment conditions at United Wholesale (Scotland) Ltd.

In July, Sarwar wrote an article in which he backed a “real” living wage, which is set at £8.45 an hour.

However, the Sunday Herald revealed that UWS, a cash and carry giant, was offering jobs at only £7.50 an hour.

UWS then refused to tell this newspaper if there was a trade union recognition agreement in place for the firm’s 250 staff by describing our line of enquiry as “politically motivated”. The MSP eventually confirmed no formal recognition exists.

READ MORE: The complacency at the heart of Anas Sarwar's disastrous leadership campaign

Sarwar tried to distance himself from the rows by saying he is a minority shareholder, rather than a director, who played no role in the company.

However, the controversy dominated Scottish politics last week and was used by First Minister Nicola Sturgeon to attack him.

After interim Scottish Labour leader Alex Rowley accused her Government of siding with "the millionaires rather than the millions" on tax decisions, Sturgeon said: “The problem here, as Anas Sarwar so clearly illustrates, is there is a massive gulf – a gulf as wide as the Clyde – between what Labour says and what Labour does.

"We have a Labour leadership candidate lecturing others about doing the right thing on pay and yet his own family firm won't pay the living wage voluntarily.”

In an attempt to draw a line under the damaging episode, Sarwar yesterday cut his financial links to UWS.

His spokesman said: “To demonstrate his commitment to public service and to ensure the campaign debate can fully focus on policy issues, Mr Sarwar has today taken the decision to relinquish all his shares in United Wholesale (Scotland).

“He will now be unable to access the assets or take any remuneration for his lifetime, demonstrating his unswerving commitment to public service. Although senior politicians have previously placed shares in a blind trust that can be accessed at a later point, Mr Sarwar will go even further and has signed a discretionary trust deed that means he can never access the assets."

In an interview with this newspaper last week Sarwar twice refused to say whether he would divest himself of his stake in the company.

He said: "I'm a minority shareholder, I'm not a director of the company.”

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When asked again about whether ending his interest in UWS would take the sting out of the row he half answered, saying. "It's something that I haven't...." before adding, "....as I say, in the company I'm not a director, I'm a minority shareholder."

According to official UWS filings, Sarwar held around 23 per cent of the company’s shares in 2015. In the same year, the firm was worth over £11.6 million.

The U-turn came as Leonard and Sarwar set out contrasting visions for Scottish Labour as the battle for the party's soul intensified.

Leonard hit out at the “elitist” private schools sector and said it was a “system that allows people with greater wealth to buy their way into it”.

However, Sarwar was again forced to defend sending his children to the fee paying Hutchesons' Grammar School, a move revealed by the Sunday Herald in 2014.