Sir Philip Green sold BHS to avoid pension liability, regulator claims

Helen Cahill
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BHS shut its shops last August (Source: Getty)

The Pensions Regulator (TPR) believes BHS tycoon Sir Philip Green took a close interest in the retailer’s pension funds during his ownership of the firm despite his protestations to MPs that he did not take part in conversations about the schemes.

In a hard-hitting report published yesterday, the regulator said it felt Green was “personally involved with the schemes”, and that he was the “driving force” behind the sale of BHS “which, we alleged, was completed without having provided appropriate mitigation for the schemes”.

Read more: Sir Philip Green's company hit with £26.4m bill for BHS fallout

Green protested to MPs in June last year that he had no involvement with the BHS pension scheme, which had amassed a deficit of £571m by the time he sold it to serial bankrupt Dominic Chappell.

He told MPs: “You can’t run a business of this size by yourself. I was not actively involved in pension conversations.”

The “regulatory intervention” report sets out the case TPR was willing to bring against Green as it pursued the retail tycoon for a multi-million pound settlement after the collapse of BHS.

As part of the case, the regulator alleged Green sold BHS to avoid his pension liabilities.

The watchdog warned Green in November it would force him to make a contribution to the pension black hole he left behind when he sold BHS for £1 to Chappell.

It sent him a warning notice of more than 300 pages explaining why it considered him liable to make a contribution to BHS pensioners, a claim supported by 13,000 documents of supplementary evidence.

The regulator’s report said: “Our warning notice also alleged that this involvement in the BHS business had also historically extended to involvement with the schemes and, over the first nine years from the acquisition of BHS by Green family companies, Sir Philip Green had taken an active interest in both schemes’ funding.”

Read more: Chappell's Retail Acquisitions, which bought BHS for £1, enters liquidation

The warning notice alleged that the tycoon was personally involved with the schemes, including investment issues, the 2012 valuation and recovery plan negotiations, and the appointment of new trustees and advisers.

TPR also said: “We argued that the main purpose of the sale was to postpone BHS’ insolvency to prevent a liability to the schemes falling due while it was part of the Taveta group of companies ultimately owned by the Green family, and/or that the effect of the sale was materially detrimental to the schemes.”

Green made six attempts to settle the case with TPR.

He ultimately contributed £363m to the BHS pension scheme, on the basis he would accept no liability in relation to the regulator’s accusations.

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