Sir Philip Green has a “moral duty” to help 20,000 BHS pension scheme members following the collapse of the high street retailer earlier this year.
The collapse earlier this year, came after Sir Philip Green sold BHS to Retail Acquisitions in March last year for £1.
According to a report from a group of MPs published today, the tycoon was prepared to dispose of BHS and its pension scheme at “any cost” to a twice-bankrupt “chancer” that was “manifestly inappropriate”. The deal, it said, represented the “unacceptable face of capitalism”.
The report from the Work and Pensions Committee and the Business Innovation and Skills Committee documents Green’s systematic plundering of BHS, which cost 11,000 jobs and put 20,000, former and existing employee pensions at risk.
When the retail entrepreneur bought BHS in 2000, the pension scheme was in surplus, it now has a deficit worth £571m.
The report says: “The headline figures that Sir Philip bought BHS for £200 million and sold it 14 years later for £1 cannot disguise the true picture. He did not invest in the company and then unfortunately fail to make it succeed. Sir Philip systematically extracted hundreds of millions of pounds from BHS, paying very little tax and fantastically enriching himself and his family, leaving the company and its pension fund weakened to the point of the inevitable collapse of both.”
As a result, the Committees have concluded that Sir Philip Green has a moral duty to help find resolution for BHS pension scheme members, which they say will invariably mean making a large financial contribution.
Rt Hon, Frank Field MP and chairman of the Work and Pensions Committee says: "One person, and one person alone, is really responsible for the BHS disaster. While Sir Philip Green signposted blame to every known player, the final responsibility for up to 11,000 job losses and a gigantic pension fund hole is his. His reputation as the king of retail lies in the ruins of BHS. His family took out of BHS and Arcadia a fortune beyond the dreams of avarice.”
Iain Wright, chair of the Business Innovation and Skills Committee adds: “The sale of BHS to a consortium led by a twice-bankrupt chancer with no retail experience should never have gone ahead; and this was obvious at the time. The reason it did, however, was Sir Philip Green. He was determined to get the deal done, no matter that the buyer could not deliver what BHS needed. There was a complete failure of corporate governance, with Sir Philip bulldozing the sale through, without proper oversight or challenge from his weak and impotent board.”
The two committees behind the report state that they will now investigate the gaps in company law and pensions regulation that allowed this to happen in separate inquiries.
Leading pensions commentator Tom McPhail, head of retirement policy at Hargreaves Lansdown says: “The report exposes the tensions between shareholder and pension scheme member interests, and poses some important questions about how we manage these tensions for the thousands of other schemes which continue to operate under the shadow of substantial deficits.”
He adds that working out how to best tackle these competing interests must be a priority for the new Prime Minister.