A disgraced tycoon
MPS slam Sir Philip Green
MPS delivered a scathing judgment on former BHS boss Sir Philip Green this week, accusing him of the “systematic plunder” of the retail chain. The billionaire’s role in the company’s collapse represented the “unacceptable face of capitalism”, according to the joint report from two Commons select committees. He had enriched himself “fantastically” through lavish dividends from BHS while failing to top up its pension fund. He then doomed BHS by selling it to Dominic Chappell, a “manifestly unsuitable” bankrupt. Green, it said, now had a “moral duty” to meet BHS’S £571m pension deficit. Hitting back, Green described the report as the “predetermined and inaccurate output of a biased and unfair process”. He also threatened legal action against committee chairman Frank Field. Field had described Green as “much worse” than the tycoon Robert Maxwell, who raided the Mirror Group’s pension fund in 1991.
What the editorials said
Too often official reports on corporate failure are “timid and equivocal”, said the Daily Mail. Not this one. MPS have produced an admirably direct account of “rapacious capitalism at its most contemptible”, exposing “the rotten culture of greed” in parts of the City and big business. Indeed, plenty of leading City “advisers” who worked on the sale of BHS must share the blame with Green, said the FT. These included bankers Goldman Sachs, accountants Grant Thornton, lawyers Olswang, and the chairman of Green’s Arcadia Group, Lord Grabiner. At the very least, they “lent respectability” to the 2015 sale of BHS for a nominal £1 to the “disreputable” Chappell. All emerge “tainted” by the report.
To mark Green’s disgrace, he must be stripped of his knighthood “without delay”, said The Times. The title was awarded in 2006 for services to retail. Yet his skills as a retailer are “worse than negligible”. After acquiring BHS in 2000 he failed to make vital investments, instead siphoning cash to his own family. The loss of his title would only be symbolic, but in such cases “symbols matter”.
What the commentators said
“Sir Philip Green is renowned in the business world for doing his own public relations,” said Ross Clark in the Daily Express. And what “an incredible job he made of it for so many years”. He won himself not only a knighthood, but also the unofficial title of the “king of retail”, and a post under David Cameron as the “government’s efficiency tsar”. Yet for much of that time he was running one of Britain’s best-known stores “into the ground” while splurging its revenues on a wildly extravagant lifestyle: the Green family has just taken delivery of their third yacht, costing a reported £100m, with six state rooms, a helipad and a swimming pool; his 60th birthday party four years ago reportedly cost £6m and featured a performance by Stevie Wonder. The sad fact is that this was all “perfectly legal”, said Simon Kelner in the i newspaper. Our indulgent tax regime allowed him to stash his “fantastic wealth” in his wife’s Monte Carlo bank account while marring the lives of the 11,000-strong BHS workforce and the 20,000 who rely on its pension fund. “That’s the kind of messed up world we live in.”
This is surely an “early test” for Theresa May, said Andrew Grice in The Independent. Her election pitch included a pledge to tackle “irresponsible behaviour in big business”. Now she can match her words with action. Why not start, as promised, with legislation to put worker and consumer representatives on company boards and allow shareholders to block bosses’ pay rises? Reform can’t come too soon, said Max Hastings in the Daily Mail. The “rapacity” of company bosses such as Green is rapidly eroding the “popular consent that provides the essential foundation for capitalism”. The average pay of FTSE chief executives now stands at £5m a year – 183 times that of the average worker – a “ludicrous” figure when measured against the “meagre achievements of most”. If ordinary workers come to believe that the system is stacked against them, “there is no telling where the story may end”.
What next?
Green is now under investigation by the Insolvency Service over his role at BHS. If found guilty of wrongdoing, he faces possible disqualification from serving as a director of any company. This would include the Arcadia group, owners of Topshop, which he currently controls.
BHS staff will be protected by the Pension Protection Fund, which is financed by a levy on pension schemes. But payouts under the Government-backed scheme are capped at 90% of a pensioner’s entitlement, and there is only limited protection against inflation.