BHS: Sir Philip Green vows to sort out pensions ‘mess’

Media captionSir Philip Green: “Nothing is more sad than how this has ended”

Former BHS owner Sir Philip Green has vowed to sort out the pensions “mess” that followed the collapse of the retailer last month.

The billionaire told MPs that his advisers were working on a “resolvable and sortable” solution for 20,000 members of the BHS scheme.

He said he would sit down as soon as possible with the regulator and would give it his “best shot”.

Sir Philip also said he had offered to help Sports Direct’s founder buy BHS.

He said Sports Direct’s founder Mike Ashley had offered to buy the business and keep the shops open and employees on the books until Christmas 2016 – even adding that he himself had offered to put in a “few million” – but that the total on the table was not sufficient.

‘Tetchy’

The pension scheme, which affects more than 20,000 people, is now in the Pension Protection Fund, where members will receive less money than they hoped.

Sir Philip, whose retail empire includes Topshop, was appearing before a joint hearing of the Business and the Work and Pensions select committees, which are investigating the demise of the 164-store group.

He has come in for criticism for the £400m in dividends taken out of the firm during his 15-year ownership, his management of the pension scheme, and the sale of BHS in 2015 to ex-racing driver and former bankrupt Dominic Chappell, who had no retail experience.

At the start of more six hours of tetchy exchanges, Sir Philip apologised for the collapse of BHS, which has led to up to 11,000 job losses.

‘It’s my fault’

“There certainly [was] no intent on my part for anything to be like this. It didn’t need to be like this,” he said.

But he said he was working on a plan for the pension scheme, which was in surplus when he bought BHS but now has a £571m deficit.

“We want to find a solution for the 20,000 pensioners,” he said. “It’s current and in motion”. He took blame for the pensions “mess”, saying: “It’s my fault”.

Sir Philip told MPs the new plan, being drawn up by accountancy group Deloitte, would offer BHS pensioners a “better outcome” than compensation available from the Pension Protection Fund, a lifeboat scheme which helps finance pensions after company insolvencies.

However, he declined to give more details of the plan. When asked if it meant scheme members would receive the pensions due before the collapse, Sir Philip said: “We are trying to fix this mess.”

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Dominic Chappell gave his evidence to the committees last week

He rejected suggestions that he had sucked money out of BHS. Sir Philip told MPs that his Arcadia retail empire had invested £800m in BHS in an attempt to turn around a business that “structurally was in the wrong shape”.

Asked when he first “thought” about selling BHS, Sir Philip replied that it was 2014. But he added that there was “no thought process – perhaps there should have been – it would have saved a lot of aggravation”.

He said: “Would I do that deal again? No”. Mr Chappell was “unfortunately the wrong guy” to buy BHS.

But Sir Philip said Mr Chappell had endorsements from lawyers, accountants and banks. He took comfort from the advisory firms Grant Thornton and Olswang, which acted on behalf of Mr Chappell, although he now thought they didn’t know him “from a hole in the wall”.

Asked about Mr Chappell’s previous bankruptcies, Sir Philip said that should not necessarily count against him. “Entrepreneurs do bad deals. That doesn’t mean they can’t go back into business,” he said, citing Walt Disney as a well-known bankrupt.

‘Stop staring at me’

He also defended his use of the tax haven Monaco to run his operations, saying: “I don’t accept that it is tax avoidance. With respect, if you look at our corporate structure, there is a lot of stuff written and I don’t want to talk about other companies, it is not my style.

“I could have been a lot more aggressive than I probably was. Every penny our company has made in the United Kingdom has paid tax.”

Image copyright
Reuters

Image caption

BHS went into administration in late April

The businessman said he only left the UK because of a heart scare. “When I went there [Monaco], I had no idea I was ever going to do any more business,” he said.

In an extraordinary exchange, Sir Philip stopped mid-sentence at one point to rebuke Richard Fuller MP for “staring” at him.

‘More questions’

He said to Mr Fuller: “Sir, do you mind not looking at me like that all the time, it’s really disturbing. You just want to stare at me, it’s uncomfortable.”

Mr Fuller replied: “I don’t wish to make you feel uncomfortable, Sir Philip… I think it is another parliamentary colleague that is known for his death stare.”

MPs have already taken evidence from Mr Chappell, the pensions regulator and advisers on the sale of.

After the hearing, the chairmen of the committees, Ian Wright and Frank Field, said they might have further questions for Sir Philip. They are already planning to recall Mr Chappell.

In a joint statement, the chairmen said: “We thank Sir Philip for giving us six hours of evidence in Parliament today, and we were pleased to hear that he is still trying to put together a better deal for the BHS pensioners.

“We hope he will come up with an offer that is satisfactory to the Pension Regulator. However, he doesn’t only have to satisfy the Pensions Regulator, today he is before the bar of public opinion. Much of his reputation now depends on how generously he responds.

“Today’s evidence raised host of further questions and we first want to get much more detail on the structure of various companies, particularly those owned by Lady Cristina Green, the profits they have made and the tax they have paid.

“We have more witnesses scheduled at the end of June and in the last few days we have received a huge amount of further evidence. We have many further questions for Sir Philip, particularly the big questions on the pension fund that he was unable to answer today.”

BHS: Sir Philip Green vows to sort out pensions ‘mess’

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