DAWSON International’s chairman blasted the UK’s emergency pension fund and the pension regulator yesterday as the Scottish cashmere firm called in administrators.
David Bolton told City A.M. that the pension protection fund (PPF) was “not fit for purpose” after it rejected Dawson’s offer for a rescue package. The company has been unable to maintain its enormous pension fund deficit, many times its annual revenue.
Bolton said that the PPF had repeatedly rejected offers of cash and a stake in Dawson, without making clear what the company would need to offer. Dawson’s pension fund will now receive protection from the PPF as the textile firm enters administration.
“Our proposal, which was all we could possibly afford, would have delivered significantly more to the PPF than it is likely to receive from administration,” Bolton said yesterday. “We literally emptied our pockets and that’s what frustrated us,” he added.
The PPF’s executive director for financial risk, Martin Clarke, responded by saying that companies can continue to operate while being covered by the PPF, but that Dawson’s offers were “inadequate”.
Dawson International, which runs Barrie Knitwear in Hawick, manufactures cashmere clothing for fashion houses and department stores around the world.
The mill has been trading profitably and generated a pre-tax profit of £1.1m in the financial year ended 31 March 2012, KPMG said.
KPMG said the Barrie business will continue to trade whilst it seeks a buyer.