Pension chiefs raised alarm over Green’s BHS sale to bankrupt

tRUSteeS of the BhS pension fund warned that the firm should not be sold by Sir Philip Green to three-times bankrupt playboy Dominic Chappell, it has emerged.

evidence published yesterday revealed the trustees believed plans by Sir Philip to sell the group and fund the pension scheme would be ‘materially detrimental’.

According to documents from Mr Chappell’s lawyers from the firm Olswang, Sir Philip, 64, had offered to invest in the BhS pension fund and create a ‘war chest’ to meet annual contributions. It was hoped this would sweeten the deal for Mr Chappell’s Retail Acquisitions company.

however, hopes that Sir Philip would invest £50million were dashed and in the end the agreement was for both sides to invest £15million over three years.

Savers in the BhS pension fund are now facing a cut of 10 per cent to their retirement incomes if it is forced into the pensions lifeboat scheme.

Labour MP frank field, chairman of the Commons work and pensions committee, said: ‘Sir Philip told us that he was going to “sort” the pension fund.

‘this is welcome but he has been giving similar personal reassurances for two years, including to Dominic Chappell. We expect him to deliver this time and ensure that his former staff get the pensions they were promised.’

A cache of emails, notes and files relating to the BhS pension fund and the sale of the group has been published by the work and pensions committee and the business, innovation and skills committee, which are jointly investigating the collapse of the retailer founded in 1928.

Mr Chappell, who has been described as a ‘mythomaniac’, a ‘Premier League liar’ and a ‘Sunday pub league retailer’, bought the chain for £1 in March last year, despite having no retail experience. BhS went into administration in April this year, with 11,000 jobs at risk.

Its pension scheme, which has the pensions of 22,000 past and present employees, has a £571million black hole.

Mr Chappell told the joint committee earlier this month that he was not aware of the true nature of the pension scheme’s black hole. however trustees have now labelled this evidence ‘incorrect and untrue’, highlighting his lack of credibility.

emails published yesterday revealed Mr Chappell admitted he was aware of the pension situation and said he had told a potential lender of the details.

Sir Philip is now drawing up a plan with Deloitte to put fresh funds into the pension scheme. Sources suggest he could offer to buy out those with small pensions with a one-off lump sum in order to protect executives with larger pension funds.

If Sir Philip cannot agree an arrangement the scheme will go into the lifeboat scheme, the Pension Protection fund (PPf), which will see many only get 90 per cent of their contributions and is capped at £32,000.

Richard Graham, tory MP and member of the work and pensions committee, said: ‘Philip Green is on the record saying to others he would look after the fund and it wouldn’t go to the PPf. he needs to live up to that. this is not a charitable donation but a commitment on behalf of the sponsoring company.’

Details published on friday by the committee revealed a director of Sir Philip’s business refused to raise contributions to the pension scheme back in 2009.

evidence also suggests Sir Philip decided to sell BhS as he did not want to put more money into the pension scheme.

‘We expect him to deliver’