Former BHS boss Sir Philip Green has been branded the “unacceptable face of capitalism” as a parliamentary inquiry found he extracted huge sums from the collapsed store group while leaving its pension fund in deficit.
In a joint report, two House of Commons select committees accused the entrepreneur of seeking to blame anyone but himself for the firm’s failure, and said he has a “moral duty” to make a “large financial contribution” to the 20,000 pensioners facing substantial cuts to their benefits in the wake of the chain’s collapse.
While the committees were also damning about Dominic Chappell, who bought BHS for £1 from Sir Philip, and the “directors, advisers and hangers-on” associated with the deal, MPs said that ultimate responsibility lay with Sir Philip. Although his family had accrued “incredible wealth” from their early, profitable years of owning BHS Sir Philip had failed to invest in the company and refused to address the “substantial and unsustainable deficit” in the pension fund.
The two committees – Work and Pensions, and Business, Innovation and Skills – said it was “inconceivable” Sir Philip had not realised Mr Chappell, a former bankrupt with no retail experience, was a “manifestly unsuitable” buyer and that he had “acted to conceal the true state of the BHS pension problem” from him.
The report comes just days after the Cabinet Office disclosed that it was reviewing Sir Philip’s knighthood and will intensify the clamour for him to be stripped of the honour.
Frank Field, chairman of the Commons Work and Pensions Committee, said: “One person, and one person alone, is ultimately responsible for the BHS disaster. His reputation as the king of retail lies in the ruins of BHS. His family took out of BHS … a fortune beyond the dreams of avarice, and he’s still to make good his boast of ‘fixing’ the pension fund.”
When Sir Philip acquired BHS in 2000 for £200 million, the report said, the company pension schemes were in surplus, but the high level of dividends paid out – more than double the after-tax profits of £208m between 2002-04 – had left it weakened.
Although he had been aware of the growing problem with the pension fund, he had resisted calls to deal with it, primarily because he did not want to reveal details of his past business dealings to the Pensions Regulator.
The MPs’ report said: “The tragedy is that those who have lost out are the ordinary employees and pensioners. This is the unacceptable face of capitalism.”