Ex-BHS boss ran empire ‘like own fiefdom’

Inquiry: Sir Philip and Lord Grabiner slated

Sir Philip Green ran his business empire as his personal fiefdom in which boards were expected to defer to his wishes rather than provide effective scrutiny of decisions, the parliamentary inquiry into the collapse of the BHS store chain has found. The joint report by two Commons select committees was particularly scathing about Lord Grabiner QC, the non-executive chairman of the Taveta group – a holding company ultimately owned by Sir Philip’s wife Lady Tina Green.

It said the peer had provided a “veneer of estab- lishment credibility” to the group while the “weak” corporate governance arrangements contributed “substantially” to the ultimate demise of BHS.

“Sir Philip chose to run these companies as his own personal empire, with boards taking decisions with reference to a shared understanding of his wishes rather than the interests of each individual company,” it said.

“The complacent performance of Lord Grabiner as the non-executive chairman of the Taveta group boards represented the apogee of weak corporate governance. In that position it was his responsibility to provide independent challenge and oversight. “Instead, he was content to provide a veneer of establishment credibility to the group while happily disengaging from the key decisions he had a responsibility to scrutinise. For this deplorable performance, he received a considerable salary.”

The report found BHS was involved in a number of transactions with a complex web of companies, many registered offshore. While it was unclear whether BHS benefited financially from these transactions, the Green family did.

It described how, in 2001, BHS Group sold 10 BHS stores for £106million to Carmen Properties Ltd – a Jersey-registered company ultimately owned by Lady Green – as part of a saleand-leaseback arrangement, with BHS paying rent to Carmen for the use of these properties.

The buildings were ultimately sold back to BHS as part of the sale to Dominic Chappell for just £70million – with the proceeds going to Lady Green – although over the lifetime of the sale-and-leaseback arrangement, rent of £153million was paid by BHS to Carmen.

“Sir Philip Green’s family accrued incredible wealth during the early, profitable years of BHS ownership,” the report said.

“Sir Philip cut costs, sold assets and paid substantial dividends offshore to the

“His family accrued incredible wealth”

ultimate benefit wife.

“He failed, however, to invest sufficiently in stores or reinvent the business to beat the prevailing high street competition.

“We found little evidence to support the reputation for retail business acumen for which he received his knighthood.” of his