After 88 years of trading, British Home Stores (BHS) finally closed - ITV News 28th August and Express 28th August. The Express reports that - "The stores were originally due to be closed on August 22, but the shut down was pushed back so that joint administrators Duff and Phelps and FRP Advisory could sell as much stock as possible to maximise returns for creditors."
In March 2015, Retail Acquisitions Ltd purchased BHS from Arcadia Group Ltd for the sum of £1 - BBC News 12th March 2015. On 11th March 2015, Sir Philip Green ceased to be a Director of BHS. Sir Philip was a Director of Arcadia Group from 16th October 2002 until 15th December 2015. Arcadia Group is in a chain of businesses with a Jersey registered private company called Taveta Ltd at the pinnacle. Sir Philip Green's wife has control of Taveta Ltd.
BHS went into administration in 2016 - BBC News 27th April 2016 - with serious concerns over the deficit in the pension funds. The concerns are likely to require the Pension Protection Fund (PPF) to step in to ensure that former employees receive at least some pension. The Board of the PPF was created by Part 2 of the Pensions Act 2004. An investigation by the Pensions Regulator - created by the Pensions Act 2004 Part 1 - is on-going.
Parliament is also involved:
In their report on BHS, the Work and Pensions and Business, Innovations and Skills Committees conclude that Sir Philip chose to rush through the offloading of a beleaguered high street institution, losing money and encumbered with a massive pension fund deficit, to a buyer who he was clearly aware was "manifestly unsuitable", with Sir Philip forced to finance the sale himself.
The Committee is considering:
- The adequacy of defined benefit pension scheme regulation and regulatory powers, in general and specifically in relation to the pension schemes of complex and multi-national companies
- Use of these powers by The Pensions Regulator in recent cases, including BHS
- Resourcing and prioritisation of TPR supervisory work
- Implications of the regulatory approach for company behaviour, including whether it mitigates or incentivises moral hazard
- The sustainability of the Pension Protection Fund
- The fairness of the PPF levy system and its impact on businesses and scheme members
The Pensions Regulator has certain legal powers under the Pensions Act 2004. These include contribution notices. The provisions are rather complex and are not analysed further here.
The chain of companies:
As at 1st June 2016, Taveta Investments (No 2) Ltd held 210204416 Ordinary Shares in Arcadia Group and they were the only recorded shareholder - Annual Return 1st June 2016. Taveta Investments (No 2) Ltd has a single shareholder - Taveta Investments Ltd - holding 10000001 Ordinary Shares. Sir Philip Green is one of the Directors of Taveta Investments Ltd and was appointed on 4th September 2002 - Annual Return Taveta Investments Ltd. One of the shareholders in Taveta Investments Ltd is a private company known as Taveta Ltd which is registered offshore in Jersey. It seems that Sir Philip Green's wife has control of Taveta Ltd.
: Settlement :
As reported by The Guardian 27 June 2017, settlement was reached between the Pensions Regulator and Sir Philip Green. "Sir Philip Green was pushed to pay into BHS’s pension after the industry regulator found the “main purpose” in selling the department store was to prevent taking on liability for the scheme. The Pension Regulator on Tuesday published its report into a deal under which Green agreed to hand over £363m in cash to rescue the BHS pension scheme, and settle one of the biggest City rows of recent years."
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