Retail tycoon Philip Green faces tough questions on BHS demise
Published 15/06/2016 | 07:29
Retail tycoon Philip Green faces tough questions on Wednesday from British lawmakers when they hope to get to the bottom of why he sold department store chain BHS to Dominic Chappell, a serial bankrupt with no retail experience.
After more than a month of hearings into the demise of BHS, which put 11,000 jobs at risk and left a gaping pensions' deficit, the star witness is finally due to appear before a joint session of parliament's Business, and Work and Pensions select committees.
For Green, who has been vilified by the media and called the "unacceptable face of capitalism" by some politicians over his management and sale of the 88-year-old store chain, it is a chance to fight back.
"This will be the first and only opportunity I have had to tell my side of the very sad BHS story and I will do my best to answer all the questions put to me in an honest and open way," he said on Tuesday.
For nearly two decades the billionaire, 64, has been one of the leading players in Britain's retail sector, purchasing Topshop owner Arcadia in 2002, and twice trying and failing to buy Marks & Spencer, Britain's biggest clothing retailer. Green was also commissioned by Prime Minister David Cameron in 2010 to report on cost savings in government.
But his reputation has been tarnished by the BHS affair.
Retail Acquisitions Ltd (RAL), a little known vehicle led by Chappell, bought the loss-making BHS from Green for 1 pound in March 2015.
BHS is now being wound down after administrators failed to find a new buyer, leaving a pensions' deficit of 571 million pounds, based on how much it would cost to fully address the shortfall between assets and future liabilities with insurance or a buyout.
Green had owned BHS for 15 years and when it was profitable paid out 423 million pounds in dividends, mainly to his family.
Some lawmakers have called for the tycoon to be stripped of his knighthood - awarded by Tony Blair's Labour government in 2006 for services to retail - if he does not make good the pension deficit.
Last week Labour lawmaker Frank Field, who chairs the Work and Pensions committee, told the Financial Times his committee "would just laugh" if Green were to offer less than 600 million pounds to settle the deficit. That prompted Green to call for Field's resignation and he threatened at one point not to appear on Wednesday.
Last week BHS's former financial consultant Michael Hitchcock told lawmakers Chappell was a "premier league liar and Sunday pub league retailer".
Chappell told lawmakers he accepted partial responsibility for the collapse of BHS, which had 164 stores, but said Green and the retailer's management should share the blame.
He accused the tycoon of preventing RAL from meeting pension regulators about the deficit and of scuppering a last-ditch rescue of BHS by Sports Direct owner Mike Ashley. The allegations were rebutted by a spokesman for Green.
Britain's Insolvency Service and the Pensions Regulator are also investigating BHS' collapse.