‘Unacceptable’ greed of Green
Sir Philip ‘ultimately responsible’ for company’s demise, finds report
FORMER BHS boss Sir Philip Green has been criticised for withdrawing huge sums of money from the collapsed retailer while leaving its pension fund in deficit.
MPs branded him the “unacceptable face of capitalism” in a report accusing him of blaming anyone but himself for the firm’s collapse, and said he has a “moral duty” to make a “large financial contribution” to 20,000 pensioners.
FORMER BHS boss Sir Philip Green has been branded the “unacceptable face of capitalism” as a parliamentary inquiry found he systematically extracted huge sums from the collapsed store group while leaving its pension fund in deficit.
In an excoriating joint report, two Commons select committees accused the entrepreneur of seeking to blame anyone but himself for the firm’s failure and said he has a “moral duty” to make a “large financial contribution” to the 20,000 pensioners facing substantial cuts to their benefits.
While the committees were damning about Dominic Chappell, who bought BHS for £1, and the “directors, advisers and hangers-on” associated with the deal, they said that ultimate responsibility lay with Sir Philip.
Although his family had accrued “incredible wealth” from their early, profitable years of owning BHS – while paying little in tax – Sir Philip had failed to invest in the company and refused to address the “substantial and unsustainable deficit” in the pension fund.
The two committees – Work and Pensions and Business, Innovation and Skills – said it was “inconceivable” Sir Philip had not realised Mr Chappell, a former bankrupt with no retail experience, was a “manifestly unsuitable” buyer and that he had ‘acted to conceal the true state of the BHS pension problem’ from him.
The report – among the most scathing ever issued by a Commons committee – comes just days after the Cabinet Office disclosed that it was reviewing Sir Philip’s knighthood and will intensify the clamour for him to be stripped of the honour.
Frank Field, the chairman of the Commons Work and Pensions Committee, said: “One person, and one person alone, is ultimately responsible for the BHS disaster. His reputation as the king of retail lies in the ruins of BHS.”
The report concluded: “Sir Philip gave insufficient priority to the BHS pension scheme over an extended period. His failure to resolve its problems by now has contributed substantially to the demise of BHS. Sir Philip owes it to the BHS pensioners to find a resolution urgently.
“This will undoubtedly require him to make a large financial contribution. He has a moral duty to act, a duty which he acknowledges.”
When Sir Philip acquired BHS in 2000 for £200 million, the report said the company pension schemes were in surplus, but the high level of dividends paid out – more than double the after-tax profits of £208m between 2002-04 – had left it weakened.
Faced with consistent losses, Sir Philip struggled to find a buyer for the company – in part because of the hole in the pension fund. Having rejected Paul Sutton – “a fraudster and a bankrupt” – he settled on his junior business associate, Mr Chappell.
The deal was completed on March 11 2015 and 13 months later, on April 26 2016, BHS went into administration leaving 11,000 employees facing an uncertain future. “The tragedy is that those who have lost out are the ordinary employees and pensioners. This is the unacceptable face of capitalism,” the report concluded.