BHS: a sordid tale of corporate greed

HOW the 11,000 beleaguered employees of BHS must seethe with anger and resentment every time they see the tanned figure of their erstwhile boss Philip Green swanning round the Mediterranean on one of his three yachts.

While Sir Shifty enjoys a playboy lifestyle on cash he plundered from the former British home Stores, they face imminent redundancy and a poorer retirement thanks to the massive hole he left in their pension fund when he washed his hands of the company last year.

The demise of BHS is a tale of rapacious capitalism at its most contemptible, exposing the rotten culture of greed and irresponsibility which still infects areas of big business and the City.

And it provides a searing indictment of some of our most prominent legal, financial and accountancy firms, who either condoned or actively colluded in the company’s downfall. The Commons report on this deeply disturbing affair tells how the belligerent Sir Philip ‘accrued incredible wealth’ by bleeding BHS dry, while starving it of vital investment and allowing the pension deficit to spiral. It’s now a staggering £571million. When he had squeezed as much as he could out of the company, he sold it for a token £1 to Dominic Chappell, a serial bankrupt with no retail experience. Inevitably the firm collapsed, but not before Chappell and his associates had helped themselves to another few million.

While most official reports into corporate failure tend to be timid and equivocal, this one is unflinching in its mission to identify the guilty – a tribute to the determination and forensic skills of Labour MP Frank Field, chairman of the Work and Pensions Select Committee.

Criticisms of Sir Philip – ‘walked away greatly enriched … acted to conceal the true state of the pension problem … fired blame to all angles except his own’ and Chappell – ‘shambolic, negligent and cavalier’ are direct and withering.

But the report is almost as scathing about the dogs that didn’t bark. Lord Grabiner, the supposedly independent chairman of the Green family’s holding company was described as ‘the apogee of weak corporate governance’. For a large salary, the wellconnected barrister provided a veneer of credibility to Sir Philip, while ‘happily disengaging’ from key decisions.

The accountancy firms Grant Thornton and PWC, lawyers Olswang and Linklater and merchant bank Goldman Sachs all acted as advisers on the BHS sale, most receiving huge fees. Yet none acted to prevent what was so clearly a disaster.

With the pensions regulator and trustees also found wanting, no one comes out of this with reputations untarnished. It’s enough to make the most committed free marketeer call for the tumbrils.

So if she is to restore public confidence in Britain’s business world, Theresa May must act quickly and decisively.

Firstly, Sir Philip should be compelled to make good the pension fund deficit and be stripped of his knighthood. Both the Serious Fraud Office and HMRC should go through his affairs with a fine-tooth comb. This must include scrutiny of the role played by his Monacobased wife Tina – nominal owner of most of his companies.

everyone involved should be thoroughly investigated and those who fall below the required standards of integrity should be driven from the corporate world.

The obligations and powers of nonexecutive directors must be toughened to curb corporate excess and the system of pension regulation overhauled.

Borrowing a phrase from the 1970s, the report says this shabby and thoroughly sordid affair shows ‘the unacceptable face of capitalism’. Ministers must never allow it to be repeated.