Retailer Philip Green has promised to help fix a gaping hole in the pension scheme of BHS as he fielded questions from lawmakers over the demise of the department store chain he owned for 15 years in a heated exchange in parliament.
BHS collapsed into administration in April, little more than a year after the retail tycoon sold it to Dominic Chappell for a nominal sum, resulting in the likely loss of 11,000 jobs as it is wound down. Mr Chappell was a serial bankrupt with no retail experience.
The collapse has left BHS’s pension fund with a deficit of £571 million and tarnished the Topshop-owner Green’s reputation as a leading British businessman.
Under questioning from politicians in Britain on Wednesday, Mr Green apologised for what happened to BHS and said he was working on a plan to plug the pension deficit, calling the situation “resolvable, sortable”.
Asked about the sale of loss-making BHS to Retail Acquisitions Ltd, a little known vehicle led by Mr Chappell, for £1 in March 2015, the billionaire admitted it was a mistake.
“Unfortunately we found the wrong guy,” he said, adding: “Would I do that deal again? No. Am I sorry we did it? Yes.”
But his contrition was mixed with flashes of annoyance as he was probed more deeply. He frequently interrupted lawmakers and complained about the line of questioning.
Mr Green said he had trusted Mr Chappell as a buyer because he had been approved by Mr Green's adviser Goldman Sachs, and was being represented by law firm Olswang and financial adviser Grant Thornton, names he called "reputable, well-regarded".
STOP STARING
Mr Green did not provide details on the plan he is working on with Deloitte to plug the pension deficit - a figure based on how much it would cost to address the shortfall between assets and future liabilities with either insurance or a buyout - as he sought to reassure BHS's 20,000 pension-holders.
“We will sort it, we will find a solution,” he said.
He told politicians the plan would offer BHS pensioners a “better outcome” than compensation available from the Pension Protection Fund, the levy-funded UK lifeboat scheme that helps finance pensions after company insolvencies.
The pension deficit compares to the £423 million of dividends Mr Green paid out during his ownership of BHS from 2000-2015, mainly to his family.
Some politiccians have called for the tycoon to be stripped of his knighthood if he does not make good the pension deficit. The honour was awarded by Tony Blair’s Labour government in 2006 for services to retailing.
Feeling the heat, Mr Green asked Richard Fuller from the ruling Conservative party not to stare at him. Filling a plastic cup of water, he spilt it over his table.
Another MP, Iain Wright from the opposition Labour party, observed Mr Green had a "dominant personality" and said that could have had implications for BHS's culture.
“You seem extraordinarily thin-skinned to quite courteous questions, as if you don’t want to be challenged in any way shape or form,” Mr Wright said. Mr Green refused to comment.
For nearly two decades, Mr Green has been one of the leading figures in Britain's retail sector, buying Topshop owner Arcadia in 2002, and twice trying and failing to buy Marks & Spencer , Britain's biggest clothing retailer.
Mr Chappell last week told lawmakers he accepted partial responsibility for the collapse of 88-year-old BHS, which had 164 stores, but said Mr Green and the retailer’s management should share the blame.
Britain’s Insolvency Service and the Pensions Regulator are also investigating BHS’ collapse.
Reuters
