BHS was “crashed into a cliff” says top Labour MP and BIS committee chair
BHS was "crashed into a cliff" by its owners, the chairman of the Business, Innovation and Skills (BIS) Committee, Iain Wright told the BBC this morning.
Wright said the troubled retailer, which was placed into administration a week ago, was sold to "tried and untested people", referring to Retail Acquisitions, the consortium which bought BHS for £1 from Sir Philip Green last year.
Green has been called to give evidence to two select committees – BIS and the Work and Pensions – over the collapse of the department store and its £571m pension deficit.
The BIS committee said they also intend to invite his wife, Lady Tina Green, who owns the Arcadia empire run by her husband and includes Topshop, Dorothy Perkins and Burton.
"We are keen to find out who knew what and when. This issue of the sale and acquisition of BHS raises enormous questions – have heard already about the pension – but also about the dividend. Something like £414m was taken out of BHS in dividends over a four year period and that's when the BHS pension scheme was slipping into a deficit," said Wright on BBC Radio 4's Today Programme.
"Is it right that people can buy a company, strip it, in many respects, of cash in terms of dividends – without real regard to pensions or to employees – and then sell it for a pound to untried and untested people who then crash it into a cliff," he added.
Christine Farnish, chair of the Peer-to-Peer Finance Association and the former chief executive of the National Association of Pension Funds, told the BBC that the pension scheme actuary, who advises the trustees of the pension plan, "should have negotiated with the employer to ensure that more contributions were paid in at the earliest possible time in order to secure those benefits".
BHS administrators Duff & Phelps said last week that they are continuing to seek a buyer for the business, with Sports Direct founder Mike Ashley confirming this weekend that he is still in the running to buy the business.
Ashley told the Telegraph: "Any continuing interest that we have in BHS would be on the basis that we would anticipate that there would not be any job losses, including jobs at head office, and that all stores would remain open."
Stores are continuing to trade as usual, although more than 10,000 jobs are at risk if the administrators do not secure a buyer a buyer for the retailer.