BHS: NOW MAKE LADY SHIFTY PAY
Pensions watchdog could force Green’s wife to plug £571million black hole
PHILIP Green’s wife faces being ordered to plug the £571million black hole in the BHS pension scheme, it emerged last night.
MPs and regulators have become exasperated by billionaire tycoon Sir Philip’s failure to come to the aid of 22,000 former staff at the failed high street giant.
As BHS stores close their doors for the last time tomorrow, it can be revealed that his wife Tina, who controls the family fortune and is now being investigated by the pensions watchdog, could be served with a notice forcing her to cough up. Such a move would be highly embarrassing to Sir Philip, whose reputation has been trashed in recent months.
Sir Philip, 64, sold BHS for £1 to threetimes bankrupt Dominic Chappell – who had no experience in retail – in March last year. The chain collapsed just 13 months later.
MPs branded Sir Philip the ‘unacceptable face of capitalism’ and called for him to be stripped of his knighthood.
Having initially excluded Lady Green, 67, from its investigation, the Pensions Regulator is understood to have broadened its inquiry and is focusing on the movement of assets within Sir Philip’s empire since he bought BHS in 2000.
A source close to the watchdog said it could issue a ‘contribution notice’ to Lady Green after making painfully slow progress with her husband. This means
she could be forced to write a cheque to bail out the pension scheme if her husband fails to do so.
Sir Philip – who has been dubbed Sir Shifty since the scandal broke – told MPs more than two months ago that he would ‘sort’ the pensions crisis, which has left the BHS scheme with a £571m shortfall.
The figure could even be as high as £700m after the Bank of England’s decision to cut interest rates and print more money pushed government borrowing costs down to record lows. Pension funds hold large quantities of government debt, or gilts, and when borrowing costs fall, pension deficits balloon because they get a smaller return on their holdings.
As the final BHS stores close, thousands of workers have no jobs and stand to lose 10 per cent of their pension income if their scheme falls into the Pension Protection Fund and a rescue package is not agreed.
While Sir Philip runs Arcadia, the group that controls Topshop, Dorothy Perkins and used to own BHS, it is actually owned by Taveta Investments.
Taveta and the £3.2 billion family fortune is owned by Lady Green through a Jersey company that holds all the families shares. The Pensions Regulator is holding talks with Sir Philip about what payments he
‘The net is closing around Sir Philip’
will make into the pension scheme, but it has also begun an anti-avoidance investigation.
This investigation gives the regulator the power to serve contribution notices to demand payment be paid into the scheme or to the Pension Protection Fund (PPF) – the safety net for failed companies.
The notice can be enforced if it is found there has been a ‘deliberate attempt to avoid’ paying into the scheme.
The regulator is thought to be particularly concerned about more than £400m in dividends extracted by the Greens from BHS between 2002 and 2004, before a huge deficit was allowed to build up in the pension scheme.
Labour MP Frank Field, the chairman of the work and pensions committee which investigated BHS, said the Serious Fraud Office was also assessing whether to launch an official criminal inquiry.
He said: ‘Lady Tina is now firmly in the frame. Although the last shops are closing, the net is closing around Sir Philip Green. It now includes his wife’s assets and the Serious Fraud Office is looking to see whether there is any evidence of fraud by deception.
‘A number of bulldogs have firmly got their teeth into Sir Philip’s backside, and there they will remain until a cheque is produced.’
While administrators have been winding up the 88-year-old business, Sir Philip has been enjoying a five-week Greek island odyssey on the couple’s new £100 million super yacht Lionheart.
Lady Green has spent two months on the yacht and was pictured hiking in Corfu this week.
Sir Philip insisted last month that he had no ‘legal liability’ to help bail out the BHS pension scheme because he did not own the company any more.
He added that any contribution on his part would be on a voluntary basis, but MPs have been appalled by his failure to move more swiftly.
Iain Wright, chairman of the business, innovation and skills select committee, plans to call for a debate in the House of Commons to increase pressure on Sir Philip when MPs return from their summer recess next month.
He told the Mail he will team up with Mr Field to lead a three-hour afternoon debate to include corporate governance, pensions liabilities and other issues thrown up from the MPs’ report into the demise of BHS.
He said: ‘These are big issues that need a government response. The findings from our report must be addressed by government.’ The debate could even lead to a renewed discussion about whether Sir Philip is stripped of his knighthood.
The retail tycoon kept a low profile yesterday as the remaining BHS shops prepared to shut their doors for the last time.
He is believed to be staying in his suite at the luxury Dorchester Hotel in London, though this was not confirmed.
Sir Philip’s spokesman made no comment on the anti-avoidance investigation.
Sir Philip said last month: ‘I have been pleased that recently real progress has been made with the Pensions Regulator in progressing towards a solution for the BHS pension schemes.
‘Our team of professional advisers has been instructed to ensure that, on our side, we do all we can to drive this forward to a positive conclusion.’ A spokesman for the Pensions Regulator said: ‘Our discussions with Sir Philip Green and his advisers are ongoing.
‘Our anti-avoidance investigation continues and our chief executive has given a clear commitment that we will have made significant progress by the end of 2016. It’s important that we do not prejudice this complex case.’
We will not be making any further comment at this stage.’
MILKED and then abandoned by Sir Philip ‘Shifty’ Green, the 22 remaining BHS stores close their doors for the final time this weekend, throwing the last of the chain’s 11,000 staff out of work and leaving 22,000 members of its pension scheme high and dry.
Meanwhile off the Greek island of Corfu, the tycoon’s billionairess wife continues her long summer cruise aboard the £100million Lionheart, one of three superyachts bought with the proceeds of her husband’s wheeler-dealing.
Some think of Tina Green, the Monacobased tax exile who nominally owns most of Sir Shifty’s assets, as an ignorant pawn in her manipulative husband’s game.
In fact, she is a shrewd businesswoman who must be aware of the labyrinthine transactions he conducts in her name.
Yet even if she were just an airhead with a vulgar taste for the high life, her responsibilities to the betrayed workers and pensioners of BHS would be quite as great as his.
For not only on paper but in practice, she is a vast beneficiary of his dealings, which allow her to crew Lionheart with 40 staff including two chefs, a hairdresser, a masseur and a dog walker.
As the titular holder of the family’s assets through a Jersey company, she is also his co-conspirator in avoiding tax and maximising dividends from the companies he runs. These include more than £400million siphoned off from BHS between 2002 and 2004.
This is why the Mail welcomes last night’s revelation that the Pensions Regulator is investigating Lady Green in its bid to plug the £571million shortfall in the BHS pension fund, left after her husband sold the company for £1 last year to a thrice bankrupt former racing driver, Dominic Chappell. Despite promising more than two months ago that he would ‘sort’ the crisis, Sir Shifty himself has yet to produce a penny of the £80million he is said to have offered – let alone the full £700million which may now be needed.
While he fails to deliver, and the Serious Fraud Office seeks evidence of criminal deception, the pensions watchdog is right to focus on his wife too.
If it is found that the couple deliberately avoided their liabilities – and why else would they offload the company to the patently untrustworthy Mr Chappell? – the regulator has the power to force them to pay up. It mustn’t hesitate to use it.
The alternative is that BHS pensioners will lose out heavily, while the bulk of the shortfall will have to be met by the Pension Protection Fund, which is financed by everyone who contributes to eligible schemes.
It will be a grotesque injustice indeed if hard-working savers are forced to pick up the bills, while the Greens wallow in luxury aboard Lionheart.