Apr 27, 2016
British MPs expect to quiz Philip Green in BHS pensions probe
Apr 27, 2016
British MPs expect to question retail billionaire Philip Green in the course of an inquiry into failed department store chain BHS's pension liabilities after the firm was put into administration on Monday.
The cross-party Work and Pensions Committee on Tuesday launched an investigation into the impact of BHS's failure on the industry levy funded Pension Protection Fund (PPF).
The committee wants to examine how the receipt of the pension liabilities from BHS, which has a deficit in its scheme of 571 million pounds, will affect the lifeboat fund and its users.
The PPF is paid for by a compulsory annual levy charged on all eligible pension schemes in the United Kingdom.
Asked if the chairman of the committee, opposition Labour lawmaker Frank Field, would invite Green to be questioned, Field's office said: "He's very sure he will be invited."
Green's office said he was not immediately available for comment.
Green sold BHS in March last year for one pound to a collection of little known investors called Retail Acquisitions. He had bought it for 200 million pounds in 2000 and when it was profitable paid out several hundreds of millions of pounds of dividends to his family.
Retail Acquisitions put the retailer into administration on Monday.
"We need ... to look at the PPF and how the receipt of pension liabilities of BHS will impact on the increases in the levy that will now be placed on all other eligible employers to finance the scheme," Field said in a statement.
"We will then need to judge whether the law is strong enough to protect future pensioners' contracts in occupational schemes," he said.
On Monday, Britain's Pensions Regulator said it was investigating the BHS pension scheme to determine whether the retailer's previous owners sought to avoid their obligations and should be pursued for contributions.
BHS had been engaged in a 23-year recovery plan to pay down its pension deficit, a plan that has been criticised by pension consultants for being too long. On Monday, lawmakers also rounded on Green for offloading BHS without making a sizeable contribution to the deficit.
The Pensions Regulator cautioned that its investigation could be lengthy.
"The regulator might want to push this all the way to the court so they set a precedent. The line is then very clearly drawn in the sand as to what you can and can't do," said Nick Moser, head of restructuring and corporate recovery at law firm Taylor Wessing.
"This one has got years rather than months in it."
Separately on Tuesday, Labour lawmaker John Mann called on Green to repay dividends taken out of BHS to reduce its pension deficit, or be stripped of his knighthood.
Green was knighted in 2006 and in 2010 Prime Minister David Cameron commissioned him to report on efficiency savings in government.
© Thomson Reuters 2021 All rights reserved.