BHS buyer did not check size of the pension black hole
THE former bankrupt businessman who bought failed retailer BHS had not done any checks about the size of the company’s pension black hole, it was claimed yesterday.
Representatives acting for Dominic Chappell met pension trustees less than a month before his firm acquired the now-collapsed chain for £1 from shopping tycoon Sir Philip Green.
And at a Parliamentary hearing yesterday, Chris Martin, who is chair of the trustees who look after the BHS pension scheme said they ‘hadn’t done much pensions due diligence’.
MPs also heard from lawyers who said they were surprised that BHS’s owners had not made it easier to find out about the plight of pensioners.
And they were told Sir Philip refused to pay more than £10m a year to rescue the troubled scheme – meaning at the time it would have taken an almost unprecedented 23 years to get it back in the black.
Members of the powerful Work and Pensions and Business, Innovation and Skills committees heard from pension trustees past and present yesterday.
They also quizzed the advisors who acted for Chappell in the controversial deal which saw the threetime bankrupt ex-racing driver handed control of an 88-year-old fashion empire.
Former pension chairman Margaret Downes told how she met Sir Philip in 2012, during a valuation of the scheme in which the size of its deficit was made alarmingly clear.
The tycoon and his financial director Paul Budge ‘stated categorically’ that £10m a year was the maximum they would give, she said.
Martin described how a last-ditch plan to rescue their stricken pension fund – dubbed Project Thor – was mysteriously withdrawn in September 2014.
It left him and colleagues ‘very, very disappointed’ and with their faith in the owners’ backing for the business severely dented.
Chappell’s advisors said they struggled to get information from Sir Philip’s side on the size of the pension fund’s problems.
Mark Byers of accountancy firm Grant Thornton said there was a ‘gap in our understanding’ about the fund. Both Byers and Stephen Hermer of law firm Olswang repeatedly ducked questions about the advice they gave to Chappell, hiding behind client confidentiality and refusing to comment.