It is quite right and proper for the MPs Business and Pensions committee to have powers (House of Commons Standing Order No 152) to ‘examine expenditure, administration and policy of the Department for Work and Pensions and its associated bodies and to call such people as it thinks appropriate to give evidence’.
BHS, the 88-year-old high street chain, has gone into administration with a £571million pension fund deficit which the Government backed pensions lifeboat may need to fund. However, in this case, talks are ongoing with investors and Sir Philip has not concluded his negotiations for funding the pension fund shortfall – so there may yet be no threat to the public purse.
But is it right for the select committee to use its House of Commons privilege to dig into the personal lives of Sir Philip and his wife, defaming them in their style of life and choice of residence because that is more salacious than finding out who was really to blame for ‘sleeping at the wheel’? Surely this is nothing short of a kangaroo court?
Richard Fuller MP said of Sir Philip Green that he was the ‘unacceptable face of capitalism’ – uh!
Arcadia Group Limited is a British multinational retailing company. It owns the high street clothing retailers Burton, Dorothy Perkins, Evans, Miss Selfridge, Topman, Topshop, Wallis and the out of town chain Outfit. I would like to know how many people in the select committee meeting had items of clothing from these stores in their wardrobes. Is this the unacceptable face of capitalism?
The three main areas of concern, to my mind, are
- why was BHS sold to Dominic Chappell who had no retail experience?
- why did Sir Philip Green take out such high dividends when the pension fund was so depleted, and
- should he have known that the pension fund was so depleted?
Sir Philip Green is a busy entrepreneur; he has to rely on his advisors. His responsibility is to choose his advisors well. He picked Goldman Sachs to do due diligence on Dominic Chappell who investigative journalists have now revealed has been three times bankrupt and has no experience in retail. In less than one year he extracted over £25million from the ailing company. Sir Philip is on record as saying that if he knew about Chappell’s lack of experience he would ‘one million per cent’ not have sold BHS to his company. Is this the unacceptable face of capitalism when his advisor has failed to do its job properly?
How did Sir Philip get away with paying his wife £400 million in dividends? In 2002, Arcadia Group plc was bought by Taveta Investments, owned by Taveta Ltd based in Jersey. Taveta Ltd is owned by Philip Green's family, and the only director is Lady Christina Green Sir Philip Green’s wife. Arcadia Limited is therefore a private company which means that it is not subject to the stringent rules of the London Stock Exchange and what it pays out in dividends is not so carefully monitored. The alleged payment of £400 million was not however paid out of BHS alone but from all his brands. Like so many entrepreneurs he has some rising stars and some duff investments. He is a very successful retailer and has every right to benefit from his hard work and expertise.
With regard to Sir Philip’s duties to the pension fund, monies were paid from the retailer to the pension for the benefit of the 20,000 employees and former employees. It is held on trust to separate the fund from the business. As soon as the payments have been made they are the responsibility of the trustees who have a ‘fiduciary duty’ to act in the best interests of the beneficiaries – the employees. It is therefore the trustees, not Sir Philip, who have the duty to make sure the fund is properly funded. Why is the blame not more properly targeted at them? Maybe because evidence from the trustees would not make such a good story as the personal lives of Sir Philip and his wife?
Sir Philip Green may not be everyone’s favourite entrepreneur, but being successful and living in Monaco should not be a good enough reason for MPs to publicly mock and ridicule him and his wife in the House of Commons for the enjoyment of the man in the street.
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