BHS was “crashed into a cliff” by its new owners after retail tycoon Sir Philip Green sold it for £1, the chairman of the Westminster committee due to hold an inquiry into the chain’s collapse has warned.
Business select committee chairman Iain Wright claimed that Sir Philip had “stripped” BHS of cash and said he would query whether the Arcadia boss thought that was “appropriate stewardship” of a company.
Sir Philip and his wife Tina Green have been asked to give evidence to Commons committees investigating the collapse of the high street chain.
Mr Wright said the panel would ask Sir Philip if it was “right” for him to sell BHS to Mr Chappell’s team, who he described as “untried and untested people”. He said: “We are keen to find out who knew what, when. This issue over the sale and acquisition of BHS raises enormous questions.”
He said: “Something like £414 million was taken out of BHS in dividends over a four-year period and that’s when the pension scheme was slipping into deficit.
“So it’s a case of ‘is it right that people can buy a company, strip it 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: “The question that we want to ask Sir Philip Green is ‘you bought BHS, took enormous sums out of the business, the pension scheme went from surplus to deficit and then you sold it for a pound to somebody who was twice bankrupt and who had no experience whatsoever of the retail sector – is that appropriate stewardship of a big, important company?’”
The MPs would also consider whether the regulatory system was working effectively.Mr Wright said: “When you sell a business do you have any further responsibility or do you start to crash it into the cliff and then bale out just before it does crash?
“Those are things we want to look at and we also want to see whether the system is fit for purpose in making sure we can create long-term value rather than making sure that people can extract value out of businesses to the detriment of employees and to the detriment, ultimately, potentially, of the taxpayer.”
Mr Wright’s committee and the work and pensions select committee will hold joint hearings into the collapse of BHS.